Gold prices fell in early Tuesday trading and are currently hovering just above the $4,200 level. There has been a resurgence in risk appetite across financial markets, reflected in gains seen in equity index futures. This dynamic is negative for the precious metal, which typically performs better during periods of risk aversion. Adding further pressure are rising hopes of a resolution to the war in Ukraine, which have reduced safe-haven flows into gold. However, the downside remains limited by increasingly dovish expectations for the Federal Reserve. Senior FOMC officials have recently made public statements that leave the door open to rate cuts in December and beyond, contributing to US dollar weakness and supporting gold prices due to the inverted price correlation between the two assets. Against this backdrop, traders will be watching closely for the release of key PCE data later in the week. As the Fed’s preferred inflation gauge, it could help solidify expectations of rate cuts and shape the short-to-medium-term outlook for gold prices.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and as such is to be considered to be a marketing communication.
All information has been prepared by ActivTrades (“AT”). The information does not contain a record of AT’s prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk. Forecasts are not guarantees. Rates may change. Political risk is unpredictable. Central bank actions may vary. Platforms’ tools do not guarantee success.