Gold holds strong at $4,200 as Fed-cut anticipation builds
Gold (XAU/USD) advances during the North American session on Friday, poised to finish the week almost flat above the $4,200 figure as market participants brace for the Federal Reserve (Fed) monetary policy meeting next week. At the time of writing, XAU/USD trades at $4,216 after bouncing off daily highs of $4,259.
XAU/USD trades flat; markets eye Federal Reserve’s expected rate cut
The week ends with the release of the Fed’s preferred inflation gauge, the Core Personal Consumption Expenditures (PCE) Price Index for September, which remained virtually unchanged, slightly closer to the 3% threshold than the Fed’s 2% goal. Although the print would justify a Fed hold, jobs data showing a cooling labor market and dovish comments by Federal Reserve officials suggest that a rate cut is most likely.
Recently, the University of Michigan revealed that American consumers grew slightly optimistic regarding the outlook of the economy. Worth noting that inflation expectations dipped, even though there is growing speculation that the impact of tariffs is yet to be felt.
On Thursday, a Reuters poll revealed that economists had priced in the December rate cut, a green light for Gold price to extend its rally.
As of writing, the CME's FedWatch tool indicates an 87.2% probability of a 0.25% reduction next week.
Source: FXstreet.com
