Gold Rebounds Above $4,100

Gold prices advanced strongly during the North American session, rising over 1.3% to trade above $4,130 per ounce. The metal recovered from weekly lows as a retreating US Dollar and falling oil prices, linked to an easing of Middle East tensions, provided support for the precious metal.

Broad US Dollar Weakness Persists

The US Dollar continued to trade on the defensive, weakening against a broad range of global currencies and providing a tailwind for dollar-denominated assets. The greenback fell against the Japanese Yen, Swiss Franc, and Mexican Peso as improving risk appetite and perceived divisions within the Federal Reserve weighed on sentiment.

Diverging Central Bank Policies Influence Forex Markets

Monetary policy divergence was a key theme, as hawkish actions from other central banks contrasted with the US Federal Reserve's posture. The New Zealand Dollar reached a three-week high following a hawkish rate hike by its central bank, while the Euro found support from a hawkish repricing of the European Central Bank's outlook.

Federal Reserve Initiates Broad Policy Review

The US Federal Reserve announced it is forming task forces to conduct a comprehensive review of its monetary policy framework. New Fed Chair Kevin Warsh tapped a group of economists and central bank outsiders to lead the overhaul, while reiterating the Fed's unwavering commitment to its dual mandate of price stability and maximum employment.