The expectation of FOMC minutes and rising US Treasury yields cause a stop in the gold surge.

1. Gold is steady in the $2020–30 level in light of the Fed's most recent monetary policy revelations.

2. The US dollar and Treasury yields react very little to the Fed's pledge to stick to its inflation targets.

3. The market expects rate changes in June following the publication of the most recent FOMC meeting minutes.

Following the release of the US Federal Reserve's (Fed) January meeting minutes, which gave investors confidence that the Fed is not in a rush to lower interest rates anytime soon, the price of gold has remained essentially steady. The US Treasury bond yields held steady at the release, despite what may be considered a "hawkish" move, while the US dollar fell by 0.04%. As of this writing, the XAU/USD trades in the $2020–30 region.

The minutes of the Federal Open Market Committee (FOMC) revealed that Fed officials are still hesitant to reduce interest rates too soon, adding that they should wait to do so until they have "greater confidence" that inflation will continue to move sustainably towards 2%. Policymakers continued to be "very attentive" to inflationary risks despite the fact that the risks associated with fulfilling both mandates are more balanced, despite the fact that economic risks are biassed downward.

The yield on US 10-year Treasury notes increased by three and a half basis points to 4.315% following the release. Meanwhile, the US Dollar Index (DXY), which measures how the US dollar performs in relation to the other six currencies, fell by 0.04% to 104.01. Fed funds futures contracts continued to price in June as the first Fed rate decrease after the announcement.

a. Market movers for the day: Gold retreats as traders anticipate a less dovish Fed

b. The CME FedWatch Tool sees traders expect the first 25 bps rate cut by the Fed in June 2024.

c. Investors are pricing in 95 basis points of easing throughout 2024.

Tracking the US dollar's performance versus a basket of six major currencies, the US Dollar Index is currently up 0.03% and trading in a close range at 104.10.

Fed representatives changed their wording and adopted a more "cautious" tone in response to the most recent US inflation data. Fed President Raphael Bostic of Atlanta implied that the Fed is not in a haste to loosen policy.

The newest inflation data, according to Richmond Fed President Thomas Barkin, are "less good," and the US still has "a ways to go" before achieving a gentle landing.

"We must fight the need to move rapidly when patience is required and be ready to react quickly when the economy changes.," said Mary Daly, president of the San Francisco Fed.

The Federal Reserve Open Market Committee (FOMC) minutes, which were released this week, will be released with speeches by Fed officials starting on Wednesday.

Additional indications for traders come from the US S&P Global PMIs, data on Initial Jobless Claims, and the Chicago Fed National Activity Index, which often precedes the Manufacturing PMI released by the Institute for Supply Management (ISM).

Technical analysis: Gold maintains its above-100-day SMA while focusing on critical resistance close to the 50-day SMA.

Due to a string of lower highs and lows, gold is currently trading in a range that is slightly skewed to the negative. The upside potential of XAU/USD may be limited by resistance at the 50-day Simple Moving Average (SMA) at $2,033.54, but if that level is broken, it would open the door to testing the $2,050.00 mark. The high on February 1 ($2,065.60) represents upside risks.

Conversely, if sellers intervene and drive prices below the $2,000 mark, the 100-day SMA will be exposed at $2,002.05. The 200-day SMA at $1,965.86 and the low from December 13 at $1,973.13 would be the next targets.