GOLD
Gold prices are hovering near their all-time highs, driven by expectations that the Federal Reserve may adopt a more dovish stance at tomorrow’s rate decision meeting. For a while, the debate has centred on the size of the September rate cut. Now, with the decision imminent, a 50-basis point cut is considered more likely than the initially expected 25-basis point reduction. This anticipation has weakened the dollar and eased treasury yields, supporting the rise of the non-yielding precious metal. Beyond the rate cut, traders will closely analyse Jerome Powell’s remarks, which are expected to provide guidance for the remainder of the year. If, as some anticipate, the Fed Chair signals openness to further rate cuts—potentially up to a full percentage point—it could lead to further dollar depreciation, offering continued support for gold prices.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
OIL
Brent oil prices are steady in early European trading, holding onto most of the previous session's gains. Over the past few sessions, crude prices have rebounded after recent weeks' losses, which pushed the price per barrel to its lowest level since December 2021. This earlier weakness was largely driven by concerns over a global demand slowdown, exacerbated by disappointing economic data from China. However, current trends suggest the beginning of a recovery for crude prices. Expectations are growing that the Federal Reserve will initiate an aggressive rate-cutting cycle, with some predicting cuts of up to a full percentage point by year-end. If Jerome Powell confirms this dovish approach in his address on Wednesday, the prospect of lower borrowing costs could brighten the economic outlook and further boost oil prices.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
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