Gold prices rebounded above $3,000 in early Tuesday trading as investors remained unsettled by the ongoing tariff saga and took cues from the overnight weakening of the US dollar. Concerns are mounting over the possibility of a US recession, prompting markets to increasingly price in the likelihood of the Federal Reserve cutting interest rates more aggressively than previously anticipated. Many now expect four quarter-point cuts over the course of the year — a prospect that is weighing on the dollar. After two sessions of gains, the greenback has given back some ground this morning, lending support to gold prices due to the inverse price correlation between the two assets. Earlier pressure on bullion prices came as portfolio managers were forced to unwind long positions in gold to meet margin calls on equity holdings. However, with equity markets stabilising somewhat, this forced selling has eased. With uncertainty still the dominant theme in financial markets and the Federal Reserve’s policy options increasingly constrained, the precious metal may have further upside potential.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
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