Gold Trades Steady Above $1,500 as Markets Await the Fed to Cut Rates This Week
Gold prices are trading steady at the beginning of a brand new trading week as markets await eagerly for the Fed's decision on interest rate
Gold prices are trading steady at the beginning of a brand new trading week as markets await eagerly for the Fed’s decision on interest rates due to come out October 30. At the time of writing, GOLD is trading at a little above $1,505.
On Friday, gold gained by more than 1% despite positive developments in US-China trade talks, as confirmed by official statements from both sides. Gold is trading above $1,500 in anticipation of the Fed announcing one more rate cut, the third this year, to counter weakening in economic growth and inflation in the US on the back of the trade war.
The surge in gold late last week was on account of investors strengthening their bets on the precious metal in anticipation of Fed’s interest rate decision. According to FedWatch’s latest estimates, there is a 93% likelihood of a 25bp rate cut by the Fed at the end of October’s meeting.
However, an improvement in trade tensions as US and China confirm that they have made progress towards finalizing a trade deal has capped gold’s gains and is exerting downward pressure on its safe haven appeal. Gold has gained over 17% so far in 2019 as the trade war escalated and both nations announced more tariffs on each other’s imports, but a partial trade deal should allay some of these concerns and reduce the possibility of an economic recession.
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