Gold Defies Hawkish Fed, Dollar Pullback Looms
Despite a stronger US dollar and hawkish Fed rhetoric, gold has maintained its ground. The DXY momentum is beginning to fade near resistance, which could lead to a short-term dollar pullback, potentially providing room for gold to rebound.
The Federal Reserve delivered a hawkish hike on Wednesday, signaling another rate increase by December. However, they kept the market guessing about whether further tightening would occur in 2027. Fed's Goolsbee stated that he is worried about services inflation and senses some inflation coming from overheating demand.
Speculative positioning remains uncertain, with traders struggling to respond to rapidly changing market signals. The latest COT forex update shows that positioning resembled a supertanker trying to adjust to shifting market conditions.