Gold prices are trading slightly higher this morning, supported by a cautious mood across financial markets. Concerns that the momentum of the US economy may be weakening, partly due to the government shutdown, continue to enhance the metal’s safe-haven appeal. However, the upside remains limited. Traders have been pricing in a lower likelihood of a Fed rate cut in December, following a series of cautious remarks from senior officials, who cited limited access to economic data and lingering inflationary pressures. This dynamic is providing support for the US dollar and is restricting further gains for gold. Even so, the broader trend remains constructive. Pessimistic economic expectations, rising risk aversion, the possibility of additional Fed cuts beyond December, and ongoing geopolitical instability are all likely to continue underpinning the precious metal in the sessions ahead.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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