This marked the primary consecutive cuts in additional than a decade, because the ECB faces a weakening financial outlook. Analysts predict that extra cuts are within the offing. Within the US, merchants count on the Federal Reserve to proceed its easing coverage following the numerous rate of interest lower in September.
Constructive U.S. macroeconomic information, together with a 0.4% enhance in retail gross sales in September and lower-than-expected unemployment claims of 241,000, bolstered the assumption that the Fed will transfer cautiously, however steadily, towards extra cuts.
Greenback weakens, gold positive factors momentum
Additional boosting gold’s rally is the current pullback within the US greenback. After reaching its highest stage since August, the greenback has fallen, permitting gold to rise because the weaker greenback makes the metallic extra reasonably priced to worldwide patrons.
“With the US greenback retreating amid expectations of looser Fed coverage, gold is clearly benefiting from a bullish outlook,” stated a senior commodity strategist.
Geopolitical dangers and election uncertainty are driving demand for secure havens
Whereas central financial institution insurance policies play an vital position in gold’s upward trajectory, ongoing geopolitical tensions and uncertainty surrounding the US presidential election are additional driving demand for the metallic.
Traders are more and more trying to gold as a hedge towards volatility as international dangers stay increased.