Gold Steady On Rate Cut Hopes

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Gold Steady On Rate Cut Hopes

Gold Steady Above $2300 On Rate Cut Speculations

slight decline was seen in the Gold prices on Tuesday, but the trend remains bullish. The upside in the Gold is stemming from the weakness seen in the US economy as the expectations for rate cuts are now sitting at an all times high.

As the expectations of rate cuts gain ground, the DXY has made a U-turn and is now sitting at 2-month lows. Despite the weakness seen in the gold prices on Tuesday, they are still above their high from May 2024.

Us Labor Market To Provide Cue On Gold'S Next Trend

Up ahead, the US labor market is due, which could provide fresh cues on how the US Fed will handle the interest rate. As we inch closer to the June and July meeting, the odds of a rate cut have increased tremendously.

The spot gold is seen trading at $2347.66 with a -0.1% change, while the Gold futures for August are trading at $2365.50 with a -0.1% change.

The bottom line is that the hopes for rate cuts have dented the US Dollar and allowed the yellow metal to shine. All of this was intensified by weaker US data, which also hints at upcoming rate cuts.

According to the CME FedWatch tool, there is a 52.1% probability of a September rate cut worth 0.25%. A day earlier, there was only a 47% chance, which highlights that the situation on the ground is changing rapidly.

As the Gold is turning higher, other precious metals are also showing a similar trend, with Platinum futures trading at a record high of $1023.50. However, copper prices remain mixed as the soft PMI data cast doubts on copper demand.

If the upcoming US data further increases the odds of a September rate cut, it will mean more upside for the Yellow metal. If that's the case, the Gold could target the next levels at $2400, $2500, and $2600 in the next few weeks.

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