Gold prices continued their upward trajectory on Monday, albeit trading slightly below the all-time high of $2,450 attained during the Asian session. The XAU/USD pair is currently trading at $2,433, marking a 0.80% increase.
Heightened expectations of monetary policy easing by major central banks, including the Federal Reserve, have bolstered market sentiment. Despite a mixed bag of sentiment, with the S&P 500 and NASDAQ 100 showing gains while the Dow Jones remains relatively flat, last week’s softer-than-expected consumer inflation report in the United States has fueled speculation that the Fed could implement rate cuts as early as September, according to data from the CME FedWatch Tool.
The probability of a 25 basis points rate cut by the Fed in September stands at 76%, with investors factoring in the likelihood of two cuts by the end of the year. This trajectory would potentially lower the fed funds rate to a range between 4.75% and 5.00%.
Looking ahead, Federal Reserve speakers are expected to dominate the US economic calendar throughout the week, preceding the release of the latest Fed meeting minutes on Wednesday. Additionally, Thursday’s data on US Initial Jobless Claims and the Chicago Fed National Activity Index are anticipated to provide insights into the state of the labor market.
