Gold remains limited to a narrow trading band, with the downside cushioned.
The gold price (XAUUSD) edged higher throughout the Asian session on Thursday, still well within striking distance of the all-time high reached the previous day.
Bets on another 50 basis point Fed rate cut in November weaken the dollar and support the metal.
Bets on another massive interest rate decrease by the US Federal Reserve (Fed) fail to aid the US Dollar (USD) to capitalize on the previous day’s excellent recovery from the vicinity of the YTD low and give support. to the unyielding golden metal.
Geopolitical concerns also serve as a tailwind ahead of statements by important FOMC members.
Middle Eastern tensions and fears about China’s economic recovery, despite recent stimulus plans, provide a tailwind for the safe-haven precious metal.
Any major intraday appreciation in the gold price appears elusive, despite slightly overbought conditions on the daily chart and ahead of Fed Chair Jerome Powell’s speech later today. Investors will look for new clues on the speed of future interest rate decreases, which will drive USD demand and the XAU/USD. Aside from this, the US macro data—the final Q2 GDP print, Weekly Initial Jobless Claims, and Durable Goods Orders—and speeches by a bevy of key FOMC members could give some meaningful impetus to a commodity.
Daily Digest Market Movers: Fed rate cut bets and geopolitical worries continue to bolster the gold price.
The US Dollar struggles to build on Wednesday’s strong comeback gains amid dovish Federal Reserve predictions, which continues to boost the non-yielding gold price.
Several Fed officials this week attempted to counter bets on more aggressive easing, but markets are pricing in a 50 basis point rate decrease in November.
As a result, Fed Chair Jerome Powell’s address later this Thursday will be widely watched for new clues about future rate cuts and to decide the XAUUSD’s near-term trajectory.
The US macro data—the final Q2 GDP print, the customary Weekly Initial Jobless Claims, Durable Goods Orders, and statements by other prominent FOMC members should also provide some momentum.
Meanwhile, the newest excitement, sparked by a new set of Chinese stimulus measures unveiled this week, fades amid concerns about their impact and a worldwide economic slump.
Furthermore, investors are apprehensive about the danger of further escalation of geopolitical tensions and a bigger conflict in the Middle East, which supports the safe-haven precious metal.
