Gold trading with a slight positive bias, nearing its all time high from Friday.
The gold price (XAUUSD) edged higher for the third day in a row, marking the first day of a positive advance in the previous six, and reached a new all-time high around $2,589 during the Asian session on Monday.
Rising expectations for a 50 basis point Fed rate drop later this month continue to serve as a tailwind.
Traders have been pricing in the prospect of an excessive interest rate decrease by the Federal Reserve (Fed), despite fresh signs of reducing inflationary pressures. United States. This maintains the US Dollar (USD) depressed near its year-to-date low set in August and serves as a significant factor acting as a tailwind for the non-yielding yellow metal.
Bulls are now awaiting this week’s significant central bank event risks before putting new wagers.
US political uncertainty ahead of the November election, as well as continuous geopolitical uncertainties, drive demand for gold as a safe haven asset. However, a generally bullish tone in global equities markets acts as a barrier for the precious metal. Traders also appear hesitant and decide to wait on the sidelines ahead of this week’s important central bank event risks – the crucial Federal Open Market Committee (FOMC) decision on Wednesday, followed by the Bank of England (BoE) and the Bank of Japan (BoJ) policy meetings on Thursday and Friday.
Daily Market Movers: Gold price remains well supported by a dovish Fed-inspired USD selling tendency.
Traders increased their betting on an enormous interest rate drop by the Federal Reserve amid signals that US inflation is slowing, which continues to operate as a tailwind for the non-yielding yellow metal.
According to the CME Group’s FedWatch Tool, there is more than a 50% likelihood that the US central bank will decrease borrowing costs by 50 basis points later this week.
US Consumer Price Index (CPI) and Producer Price Index (PPI) numbers released last week fueled forecasts.
The weaker US Consumer Price Index (CPI) and Producer Price Index (PPI) numbers released last week fueled forecasts, providing additional evidence of lessening inflationary pressures.
The yield on the benchmark 10-year US government bond remains around the lowest level since May 2023, while the US Dollar is within striking reach of its year-to-date low from last month.
Reports of a second attempted assassination attempt on Republican presidential nominee Donald Trump at his Florida golf club on Sunday bolster demand for safe-haven gold.
The ongoing Russia-Ukraine war, combined with increased instability and the potential of further escalation of hostilities in the Middle East, appears to be another reason supporting the XAUUSD.
Bullish traders, on the other hand, appear hesitant to put new bets, preferring to wait for the conclusion of Wednesday’s highly anticipated FOMC monetary policy meeting before doing so.
This week, investors will draw signals from the policy meetings of the Bank of England and the Bank of Japan. might inject volatility into the markets and provide some momentum to the metal.
