The post Gold price drifts lower amid modest USD strength, downside potential seems limited appeared on BitcoinEthereumNews.com.

Gold price attracts some sellers and snaps a two-day winning streak amid a bullish USD. Expectations for a less aggressive Fed easing underpin the US bond yields and the buck. Geopolitical risks and bets that the Fed will cut rates further limit losses for the XAU/USD.  Gold price (XAU/USD) rallied over 1% on Friday and settled near the weekly top following the release of the US Producer Price Index (PPI), which pointed to a favorable inflation outlook and suggested that the Federal Reserve (Fed) will cut interest rates further. Apart from this, safe-haven demand stemming from the geopolitical tensions in the Middle East further benefited the bullion and contributed to the move up.  That said, investors have now fully priced out the possibility of another oversized Fed rate cut in November. This keeps the US Treasury bond yields elevated and the US Dollar (USD) close to its highest level since mid-August touched last week. Adding to this, the optimism led by China’s pledge to increase debt to revive its economy exerts some pressure on the Gold price during the Asian session on Monday.  Daily Digest Market Movers: Gold price is pressured by modest USD strength, downside potential seems limited The US Bureau of Labor Statistics reported that the headline Producer Price Index (PPI) for final demand rose 1.8% and the core gauge climbed 2.8% on a yearly basis in September. The readings were slightly higher than consensus estimates, though pointed to a deceleration in price rise, which should allow the Federal Reserve to continue cutting interest rates. According to the CME Group’s FedWatch Tool, the markets are currently pricing in over a 90% chance that the Fed will lower borrowing costs by 25 basis points in November.  The yield on the benchmark 10-year US Government bond, however, holds steady above…

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Filed under: News - @ October 14, 2024 3:02 am