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Gold Outlook: Focus On Rate Cut Odds As Sentiment Improves
(MENAFN- Mid-East Info) By Daniela Sabin Hathorn, senior market analyst at Capital
Gold (XAU/USD) is back trading with an upside bias after a few days of sideways consolidation following a downside correction earlier this month. Markets had been drifting without a clear direction last week as uncertainty about the Fed's policy outlook caused risk appetite to dwindle. This week, the push higher in gold is largely being driven by renewed expectations that Fed could cut interest rates again in December, a shift fuelled by disappointing U.S. economic data and dovish comments from Fed officials. The latest pricing on the CME FedWatch tool shows that the odds of another cut are now at 85%, having risen sharply from under 20% just a week ago. Several factors have triggered this move, but the latest driver seems to be the increase in odds that Kevin Hassett, chairman of the president's National Economic Council, will get elected by Trump as the new Fed Chairman next year. His dovish growth focus is thought to be the one that most aligns with Trump's views that that rates can fall much further, making him the perfect candidate. If he was elected, a faster easing cycle would be priced in. Who will Trump nominate as Fed Chair? odds on Kalshi -p decoding="async" class="CToWUd" title="A graph of stock marketAI-generated content may be incorrect." src="#" alt="A graph of stock marketAI-generated content may be incorrect." width="624" data-bit="iit" /> Past performance is not a reliable indicator of future results.
Gold (XAU/USD) is back trading with an upside bias after a few days of sideways consolidation following a downside correction earlier this month. Markets had been drifting without a clear direction last week as uncertainty about the Fed's policy outlook caused risk appetite to dwindle. This week, the push higher in gold is largely being driven by renewed expectations that Fed could cut interest rates again in December, a shift fuelled by disappointing U.S. economic data and dovish comments from Fed officials. The latest pricing on the CME FedWatch tool shows that the odds of another cut are now at 85%, having risen sharply from under 20% just a week ago. Several factors have triggered this move, but the latest driver seems to be the increase in odds that Kevin Hassett, chairman of the president's National Economic Council, will get elected by Trump as the new Fed Chairman next year. His dovish growth focus is thought to be the one that most aligns with Trump's views that that rates can fall much further, making him the perfect candidate. If he was elected, a faster easing cycle would be priced in. Who will Trump nominate as Fed Chair? odds on Kalshi -p decoding="async" class="CToWUd" title="A graph of stock marketAI-generated content may be incorrect." src="#" alt="A graph of stock marketAI-generated content may be incorrect." width="624" data-bit="iit" /> Past performance is not a reliable indicator of future results.
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