Gold steady as markets balance Fed rate cut hopes with easing US shutdown risk
Gold (XAU/USD) maintains its bullish tone on Tuesday, extending Monday’s sharp advance as dovish Federal Reserve (Fed) expectations continue to underpin sentiment. At the time of writing, XAU/USD is trading near three-week highs around $4,140, up nearly 0.7% on the day.
However, the precious metal lacks strong follow-through buying as optimism builds that the record-long United States (US) government shutdown is nearing an end, tempering some safe-haven demand.
Although progress toward reopening the US government has improved the market mood, investors remain cautious. A government reopening may ease short-term worries but is unlikely to resolve deeper fiscal and economic challenges.
With the government gradually reopening, the delayed release of key economic data is expected to resume, which could strengthen the case for additional monetary policy easing if the figures confirm further signs of slowdown in the US economy.
Against this backdrop, and with persistent geopolitical risks, Gold’s near-term outlook remains constructive, with buyers likely to stay active on dips.
Source: Fxstreet.com
