Asia Gold Steady, Fed is Expected to Cut Interest Rates

Asia Gold Steady, Fed is Expected to Cut Interest Rates

$GLD, $XAU, $SLV, $XAG. $USD

Gold flat to little changed Monday, after a near 1% jump in the session, Friday’s as investors awaited a Fed rate decision later in the week, while progress in US-China trade talks limited upside.

  • Spot gold steady at $1,504.44 oz as of 0326 GMT,
  • US gold futures were up 0.1% to $1,507.20 oz,
  • Silver fell 0.2% to $17.98 oz,
  • Platinum was flat at $926.25 oz,
  • Palladium rose 0.5% to $1,773 oz.

“The market is waiting for the Fed’s take on interest rate cut and the outcome of U.S.-China trade negotiations on Nov. 16” said the chief dealer at Lee Cheong Gold Dealers.

The Fed is scheduled to meet on 29-30 October where it is expected to reduce its benchmark interest rate for the 3rd time running this year.

The high hopes for a rate cut at the upcoming FOMC meeting helped to light up the gold market.

Gold prices surged Friday as weak U.S. economic data bolstered bets of monetary policy easing by the FOMC.

Traders see a 90.4% chance for a 25 basis point rate cut by the FOMC at its month-end monetary policy meeting, according to CME Group’s FedWatch tool.

President Trump last week said the US is doing very well in its trade negotiations with China and that China wants to make a deal “very badly.

The remarks boosted investors’ appetite for riskier assets, sending Asian shares to a 3-month high Monday.

Gold prices were also being weighed by a strong USD, which makes the precious Yellow metal expensive for buyers holding other currencies.

.DXY, which measures the Buck against a basket of peer currencies, was slightly up Monday morning after rising nearly 0.6% last week.

The EU agreed Friday to London’s request for a BREXIT deadline extension but set no new departure date, giving Britain’s divided Parliament time to decide on Prime Minister Boris Johnson’s call for a snap election.

Have a terrific week.

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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