Spot Gold held steady near an all-time high of $3,673.95/oz. on Monday ahead of a widely expected interest rate cut by the Federal Reserve.
Annual headline consumer inflation in the US picked up to 2.9% in August from 2.7% in July, the latest data showed. Yet, market players expect it will probably not deter the US central bank from easing policy.
Markets are now pricing in about a 96% chance of a 25 basis point Fed rate cut this week and a 4% chance of a super-sized 50 basis point cut.
Lower interest rates tend to reduce the opportunity cost of holding Gold, which pays no interest.
“The bullish outlook remains in place; however, a period of consolidation or a minor pullback would arguably be a healthy outcome that supports gold’s ambitions for hitting loftier price targets down the road,” KCM Trade Chief Market Analyst Tim Waterer was quoted as saying by Reuters.
“The risk for gold this week is that the Fed may not be so clear-cut in signalling when further rate cuts could arrive,” Waterer added.
Spot Gold was last down 0.12% on the day to trade at $3,638.67 per troy ounce.
For Gold, “while we see the risks to our $4,000/toz mid-2026 forecast as skewed to the upside, rising speculative length raises the risk of tactical pullbacks, as positioning tends to mean-revert,” Goldman Sachs said in a note.
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