Gold surges on neutral Fed bets, hawkish stance

Gold price delivers a range breakout ahead of the Fed’s monetary policy decision. The yellow metal is trading at $1944.34 per ounce at the time of writing, up by %0.67. The US Dollar remains subdued as the Fed is expected to keep the interest rates unchanged.

A steady policy announcement is likely to be followed by a hawkish outlook.

Gold price extends recovery ahead of the interest rate decision by the Federal Reserve (Fed). An unchanged monetary policy along with a hawkish interest rate outlook is widely anticipated as the Core Consumer Price Index (CPI), which is generally considered when setting the interest rate framework, is consistently declining.

Worries about the interest rate outlook from the Fed deepen as US Treasury Secretary Janet Yellen said that growth has to slow to ensure price stability in a low unemployment scenario.

The economic resilience of the US economy is good news, but it is also becoming a major roadblock for Fed policymakers in their quest to bring back inflation to the desired rate. Labor demand, wage growth, and consumer spending have remained strong, while woes in the manufacturing and the housing sector persist.