Gold prices touched a one-week high before giving up those gains in early Tuesday trading. The precious metal’s upside is being capped by some dollar strength and a generally positive tone in equity markets, but this morning’s pullback is unlikely to trigger meaningful losses. Recent dovish comments from Federal Reserve officials, combined with weeks of contradictory signals that have sent expectations of a December rate cut on a roller coaster, are fostering a growing sense that the Fed’s stance may be softening — a dynamic that bodes well for gold. Traders will wait for confirmation from the key data releases due later today, including September PPI and retail sales, which could provide the final push for more significant bets on near-term rate cuts. Against a backdrop of ongoing economic uncertainty, geopolitical turbulence and rising expectations of a dovish Fed, today’s dip is likely to be seen as a buying-the-dip opportunity, with further upside possible for the precious metal.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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