Gold rebounded from a multi-week low amid sluggish USD price movement.

Gold price (XAUUSD) edged higher during the Asian session on Thursday, appearing to have ended a six-day losing skid to a nearly three-week low retested the day before. The US Dollar (USD) enters a positive consolidation phase as traders choose to remain on the sidelines ahead of the release of the US Consumer Price Index (CPI) later today. Heading In terms of significant data risk, some repositioning trades prove to be a key component in supporting the precious metal.

The XAUUSD should remain under pressure due to expectations of a normal 25 basis point Fed rate drop in November.

Any major upward movement in the gold market, however, appears difficult as the Federal Reserve’s (Fed) chances for more aggressive policy easing dwindle. The September FOMC meeting minutes supported the expectations, keeping US Treasury bond yields elevated and likely capping the non-yielding yellow metal. As a result, a significant follow-through buying is required to confirm that the Gold (XAUUSD) corrective decline from its all-time high has ended.

Daily Market Movers: Gold price creeps up on minor repositioning trade ahead of the US CPI release.

The minutes of the September FOMC meeting revealed that a majority backed the 50 basis. The committee decreased interest rates by a point because it was sure that inflation will reach the 2% target.

Some participants, however, stated that they would have preferred merely a 25 basis point rate cut, noting persistently high inflation, strong economic growth, and a low unemployment rate.

Furthermore, there was agreement that the massive rate decrease would not bind the Federal Reserve to any set pace of future cuts, sending the US Dollar to a nearly two-month high.

Dallas Fed President Lorie Logan cited significant uncertainties about the economy’s prognosis, but stated that she preferred lower rate cuts in the future.

Boston Fed President Susan Collins emphasized that policy is not on a predetermined course and will remain data-dependent, and that it is critical to maintain a robust labor market. conditions.

San Francisco Fed President Mary Daly stated that one or two more rate cuts are expected this year, but added that a 50 basis point decrease in September says nothing about the extent of future cuts.

Traders now expect the Fed to cut borrowing costs by only 25 basis points in November.

Gold Traders now expect the Fed to cut borrowing costs by only 25 basis points in November, with more than a 20% possibility that rates would remain unchanged.

The yield on the rate-sensitive two-year US government bond soared to its highest level since August 19, while the benchmark 10-year Treasury yield reached levels not seen since July 31.

Investors were cautious about growing tensions between Israel and Iran, with Israeli Defense Minister Yoav Gallant promising that an attack against The latter would be “lethal, precise, and surprising”.

This, combined with some repositioning trading before of the critical US Consumer market Index (CPI) release, provides some support to the safe-haven gold market during the Asian session on Thursday.