Gold price risen to an all-time high as investors expect the Fed to ease policy further.
The Gold price (XAUUSD) attracted buyers for the fifth day in a row on Wednesday, reaching another record high around $2,670-2,671 during the Asian session. The US Dollar (USD) remains near its year-to-date low set last week, with betting on a more aggressive policy easing by the Federal Reserve (Fed), which works as a tailwind for the non-yielding yellow metal.
Concerns about a bigger crisis in the Middle East also support the XAUUSD.
The risk A further escalation of global tensions and a bigger conflict in the Middle East will support the safe-haven gold price. To a greater extent, the supporting factors outweigh the optimism fueled by China’s fresh stimulus measures and the prevailing risk-on atmosphere, which tends to undercut demand for the safe-haven precious metal.
Bulls get wary amid an overbought RSI ahead of Fed speeches and US PCE data.
However, slightly overbought conditions on the daily chart prevent traders from initiating new optimistic wagers on the gold price. Investors appear hesitant to make aggressive wagers ahead of comments by prominent FOMC members, such as Fed Chair Jerome Powell on Thursday and the US Personal Consumption Expenditure (PCE) Price Index on Friday.
Daily Market Movers: Gold prices supported by dovish Fed predictions and geopolitical threats.
According to the According to CME Group’s FedWatch Tool, the markets are currently pricing in a more than 75% possibility of the Federal Reserve cutting interest rates by another 50 basis points in November.
Furthermore, Tuesday’s dismal US macro data impacted severely on the US Dollar, dragging it back closer to the year-to-date low while raising the non-yielding gold price to a new all-time high.
The Conference Board’s (CB) Consumer Confidence Index decreased to 98.7 in September from 105.6 in August, while the Present Situation Index declined to 124.3 from 134.6.
According to a Richmond Fed survey, manufacturing activity remained sluggish in September, with the composite manufacturing index falling to -21 from -19 the previous month.
On Monday, Israel conducted airstrikes in southern and eastern Lebanon. Over 500 people were killed, the likelihood of a larger war in the Middle East increased, and the safe-haven Gold (XAUUSD) rose further.
The newest optimism, driven by China’s new stimulus measures, remains supportive of the risk-on rise, while it does nothing to dampen the robust optimistic attitude surrounding the precious metal.
Fed officials’ speeches this week, notably Jerome Powell’s on Thursday.
Fed officials’ speeches this week, notably Fed Chair Jerome Powell’s on Thursday, will be watch for clues about the rate-cutting path and will add further impetus to the commodities.
Meanwhile, the attention will remain on Friday’s release of the US Personal Consumption Expenditure (PCE) Price Index, which will drive USD demand in the immediate term.
