New Gold Price High on USD Weakness, Ahead of FED Rate Cut

The upside doesn’t seem to end, with buyers pushing the Gold price to new record highs almost every day, as the USD tumbles lower on FED rate cut expectations. Earlier this month the market was leaning heavily toward a 25 bps cut by the FED, but after the CPI and PPI inflation reports last week, the odds are more balanced now, with markets currently pricing in a more dovish Fed as they look for ~60 % odds of a 50 bps rate cut. which has turned the USD soft, benefiting all other assets.

USD Under Pressure in European Trading

In today’s trading, the U.S. dollar is struggling, losing ground in the morning European session. The USD/JPY pair has been particularly noteworthy, dipping below the key 140.00 level to reach 139.58, its lowest point since July of last year, before rebounding slightly to hover around the 140.80 mark. Risk-sensitive currencies like GBP/USD and AUD/USD have also seen gains, though the momentum has paused during the U.S. session.

Gold Chart 30 Minute – Buying Momentum Remains Strong

Gold continues to perform well after breaking to new record highs last week, hitting an all-time high of $2,589. The precious metal is up another 0.3% today and is expected to maintain its upward trajectory as markets await the Federal Reserve’s meeting later this week. With gold’s status as a safe-haven asset, the anticipation around the Fed’s decision is helping to sustain its bullish trend.

Focus on Central Bank Meetings This Week

This week is centered around key central bank meetings, with the Federal Reserve’s decision being the most highly anticipated. Traders are positioning themselves ahead of the event, which is likely to keep markets volatile in the lead-up. The prevailing sentiment among traders suggests hopes for a dovish Fed stance, even if the central bank opts for a 25 basis point rate cut. The belief is that any dovish signals from the Fed could further influence market dynamics, including currency movements.

Anticipation of Fed Policy Decision Surprise

There is growing speculation that the Fed could surprise market participants this week. Whether it be through more dovish rhetoric or actions, traders appear to be positioning for a potential shift in policy tone. While the Fed is expected to influence any currency movements that occur, the market is on edge, anticipating whether the central bank will confirm these dovish expectations or deliver an unexpected move.

Gold Live Chart