Market Analysis: Powell's dovish remarks and the Fed's dovish response mechanism support gold's upward trend

Gold Daily reported that Investinglive analyst Giuseppe Dellamotta stated that recently, Federal Reserve Chair Jerome Powell made more dovish remarks than expected at the FOMC press conference, providing support for gold prices. He downplayed inflation risks and emphasized the weakness in the labor market, implying that the Fed’s tolerance for higher inflation is higher than its tolerance for a weak labor market. This week’s focus is on the US non-farm payroll report and the Consumer Price Index (CPI) report. Currently, the market expects the Federal Reserve to cut interest rates by 57 basis points by the end of 2026. If US economic data remains strong, especially in the labor market, we may see the market adjust interest rate expectations hawkishly, leading to a decline in gold prices. On the other hand, weak data should further support precious metal prices, as the market will be betting on rate cuts in advance. From a broader macro perspective, due to the Fed’s dovish reaction mechanism, real yields may continue to decline, so gold prices are expected to maintain an upward trend. However, in the short term, further hawkish adjustments to interest rate expectations could put pressure on the market.