Gold hovers near record high on prospects of bigger Fed rate cut
Sept 17 (Reuters) -Gold prices held steady on Tuesday to hover near record highs scaled in the previous session, as markets anticipate the beginning of a U.S. easing cycle, with expectations that it might start with an outsized rate cut.
FUNDAMENTALS
* Spot gold XAU= was flat at $2,582.84 per ounce, as of 0020 GMT. Bullion rose to a record high of $2,589.59 on Monday.
* U.S. gold futures GCcv1 were also steady at $2,609.90.
* All attention will turn towards the U.S. Federal Reserve this week where they are expected to announce at least a 25-basis-point cut to interest rates at the conclusion of its September policy meeting on Wednesday.
* Markets are currently pricing in an 62% probability of a 50-bp easing at the conclusion of the two-day meeting, against 43% on Friday. The odds have narrowed sharply after media reports revived the prospect of a more aggressive easing. FEDWATCH
* Zero-yield bullion tends to be a preferred investment amid lower interest rates and geopolitical turmoil.
* Markets will also focus on U.S. retail sales data due at 1230 GMT.
* Meanwhile, the dollar .DXY weakened to near two-week low in the previous session, making greenback-priced gold less expensive for other currency holders. USD/
* Elsewhere, the Bank of Japan is expected to keep monetary policy steady next week, but signal that further interest rate hikes are coming and highlight progress the economy is making in sustaining inflation around its 2% target.
* Investors also digested news from Sunday that Republican presidential candidate Donald Trump was the subject of a second assassination attempt.
* Political instability often supports gold prices, as investors seek the safety of the precious metal amid unstable or unpredictable conditions.
* SPDR Gold Trust GLD, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.20% to 872.23 tonnes on Monday. GOL/ETF
* Spot silver XAG= fell 0.2% to $30.70 per ounce, platinum XPT= rose 0.4% to $984.81 and palladium XPD= gained 0.4% to $1,080.78
DATA/EVENTS (GMT)
0430 Japan Tertiary Ind Act NSA July
0900 Germany ZEW Economic Sentiment Sept
0900 Germany ZEW Current Conditions Sept
1230 US Retail Sales MM Aug
1315 US Industrial Production MM Aug
Reporting by Daksh Grover in Bengaluru; Editing by Sherry Jacob-Phillips
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
