Shutdown & Interest Rates Loom, Gold Holds
Gold prices were stable in the Asian session on Monday, trading around $4,261 per ounce. The gold market moved cautiously after last week's sharp rally, amid market concerns about the worsening US fiscal situation due to the government shutdown, which is now entering its 19th day. This political uncertainty has prompted investors to seek safe haven assets like gold, although today's movement has been relatively calm.
In addition to the shutdown issue, expectations of an interest rate cut by the Federal Reserve have also supported gold prices. Data from the CME FedWatch Tool shows the market is almost fully pricing in an interest rate cut in October, with a further cut likely in December. Comments from St. Louis Fed President Alberto Musalem, who left open the possibility of a rate cut if inflation remains under control, further bolstered bullish sentiment in the precious metals market.
Another external factor comes from US-China trade relations. President Donald Trump has expressed a willingness to lower tariffs on China if Beijing takes concrete steps, including soybean purchases. While this could boost overall market risk appetite, the potential for improved trade relations also creates uncertainty about the short-term direction of gold.
For now, gold prices remain strong, although they haven't yet extended their gains. Investors are awaiting clarity from trade talks between top US and Chinese officials scheduled for this week, as well as further developments in US budget discussions. As long as political uncertainty and interest rate direction remain high, gold will likely remain in demand as a hedge. (asd)
Source: Newsmaker.id
