Gold Price Rises as Fed Rate Cut Expectations Grow
Gold price posted gains of over 0.18% during the North American session on Monday, bolstered by a weaker US Dollar as traders eye Wednesday's US Federal Reserve (Fed) monetary policy decision. Expectations for a larger-than-expected rate cut bolstered the XAU/USD, which trades at $2,582 after bouncing off a daily low of $2,576.
Market sentiment is mixed ahead of the Fed's decision. Data shows that the chances that Jerome Powell and his colleagues will deliver a 50-basis-point (bps) cut are growing. The CME FedWatch Tool shows that odds for a 50 bps cut rose from 50% to 59%, while for a 25 bps cut they stand at 41%.
The drop in US Treasury yields also supported the golden metal. The US 10-year benchmark T-note is falling two and a half bps to 3.631%, a tailwind for the non-yielding metal.
Consequently, this weighed on the Greenback, which according to the US Dollar Index (DXY) fell 0.36% to 100.74.
In the geopolitical space, risks of an escalation of the Middle East conflict remain while an apparent assassination attempt against former US President Donald Trump weakened the Greenback, according to Bloomberg.
Source : FXStreet
