Daily Digest Market Movers: Gold price remains supported by dovish Fed-inspired USD selling bias
- Traders lifted bets for an oversized interest rate cut by the Federal Reserve amid signs that inflation in the US is subsiding, which continues to act as a tailwind for the non-yielding yellow metal.
- According to the CME Group's FedWatch Tool, the current market pricing indicates over a 50% chance that the US central bank will lower borrowing costs by 50 basis points later this week.
- The expectations were fueled by the softer US Consumer Price Index (CPI) and the Producer Price Index (PPI) reports last week, which provided further evidence of easing inflationary pressures.
- The yield on the benchmark 10-year US government bond languishes near its lowest level since May 2023, while the US Dollar remains within striking distance of the YTD low touched last month.
- Reports of a second attempted assassination attempt on Republican presidential candidate Donald Trump at his Florida golf club on Sunday further underpin demand for the safe-haven bullion.
- The protracted Russia-Ukraine war, along with rising instability and the risk of a further escalation of tensions in the Middle East, turns out to be another factor lending support to the XAU/USD.
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