Spot Gold held above the $4,200 mark on Monday, following the sharp sell-off on Friday, being supported by expectations of more Federal Reserve interest rate cuts. Market players also awaited the upcoming trade talks between Washington and Beijing.
The yellow metal lost more than 1.6% last Friday, after US President Donald Trump said the proposed 100% tariff on Chinese imports would not be sustainable.
Trump said he planned a meeting with Chinese President Xi Jinping and expressed optimism that trade ties with China would be fine.
“The gold market is trying to find its footing after Friday’s selloff. Sentiment is normalizing, cooling down a bit, after a few weeks of mania,” Capital.com analyst Kyle Rodda was quoted as saying by Reuters.
“The next big hurdle will be U.S.-China talks this week and the CPI release out of the United States on Friday. Something that I think has allowed for this surge in gold prices is the vacuum created by an absence of economic data.”
Markets are now pricing in about a 99% chance of a 25 basis point Fed rate cut in October and a 96% chance of another 25 bps cut in December.
Spot Gold was up 0.05% on the day to trade at $4,256.01 per troy ounce.
Strong central bank buying, US tariff policies, potential rate cuts by the Federal Reserve, robust ETF inflows and geopolitical uncertainty have fueled Gold’s rally to a series of record highs this year. Year-to-date, the yellow metal has surged 62.18%.
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