Fed minutes reveal cautious monetary easing plans, citing slower inflation and stable labor market trends.

Gold (XAU/USD) turned bearish on Thursday, retreating to $2,658.44 after failing to extend gains near $2,659. The precious metal faces mounting pressure as the US Dollar (USD) strengthens, buoyed by expectations that the Federal Reserve will slow its pace of interest rate cuts. The USD hovers near a two-year high, driven by stable labor market data and rising Treasury yields, leaving gold vulnerable.

The Federal Open Market Committee (FOMC) minutes revealed policymakers' preference for cautious monetary easing, citing slowing inflation. Meanwhile, ADP data showed US private sector payrolls rose by 122,000 in December, missing expectations and marking a decline from November's 146,000. Initial Jobless Claims, however, fell to 201,000, the lowest since February 2024, signaling continued labor market strength.