Gold trims losses after softer US inflation reinforces dovish Fed outlook
Gold (XAU/USD) stages a rebound on Friday, trimming intraday losses as the US Dollar (USD) and Treasury yields soften following softer-than-expected US Consumer Price Index (CPI) data.
At the time of writing, XAU/USD is trading around $4,100, recovering from session lows near $4,044, though the metal remains on track to snap its nine-week winning streak.
Market sentiment somewhat improved amid hopes of a de-escalation in the renewed US-China trade standoff. The White House confirmed on Thursday that US President Donald Trump will meet his Chinese counterpart Xi Jinping on October 30 on the sidelines of the APEC Summit in South Korea, a development that helped ease recent trade tensions.
The fundamental backdrop for Gold remains supportive. The prolonged United States (US) government shutdown and persistent geopolitical and economic uncertainties continue to drive safe-haven demand for the yellow metal.
At the same time, markets widely expect the Federal Reserve (Fed) to trim interest rates by 25-basis-point (bps) at its October 29-30 monetary policy meeting. Lower borrowing costs typically enhance the appeal of non-yielding assets like Gold, as they reduce the opportunity cost of holding the metal.
Source: FXStreet
