Gold Prices Soar on Fed Rate Cut Expectations

17 Sep 2024 , 09:44 AM

Gold prices remained stable on Tuesday, hovering near record highs set the previous day, as markets await the start of a US easing cycle, which could begin with an outsized rate cut.

Spot gold was unchanged at $2,582.84 per ounce. On Monday, bullion reached a record high of $2,589.59. U.S. gold futures held unchanged at $2,609.90.

All eyes will be on the US Federal Reserve this week, as they are expected to announce at least a 25-basis-point cut in interest rates at the end of their September policy meeting on Wednesday.

Markets are currently pricing in a 62% chance of a 50-bp cut at the end of the two-day meeting, compared to 43% on Friday. The odds have shrunk dramatically as media reports rekindled the possibility of a more aggressive easing.

During periods of low interest rates and geopolitical uncertainty, zero-yield bullion is a popular investment.

Markets will also be watching for retail sales data from the United States, which is scheduled for release at 1230 GMT.

Meanwhile, the dollar fell to a near two-week low in the previous session, making greenback-priced gold less expensive for other currency holders.

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