Gold Slips as US-China Trade Hopes Rise, but Fed Rate Cut Bets Keep It Steady
Gold prices moved slightly lower on Monday as fresh optimism about the US-China trade deal reduced demand for the safe-haven metal. Investors showed more interest in riskier assets like stocks after reports suggested that both countries had agreed on a basic framework for a trade deal. This positive mood pushed gold down, but losses were limited as traders still expect the Federal Reserve to cut interest rates soon.
The latest US inflation data also supported rate-cut expectations. The Consumer Price Index (CPI) for September rose by just 0.3% month-on-month and 3% year-on-year, which was slightly below market forecasts. This weaker data increased hopes that the Fed could lower rates to support the economy.
Even though gold dropped, it managed to stay above recent lows. Many traders remained cautious ahead of the Fed’s upcoming two-day policy meeting. Ongoing geopolitical tensions also continue to provide some support for gold prices, preventing a major selloff.
Impact:
Gold might recover if optimism around the trade deal fades or if the Fed signals deeper rate cuts. However, a stronger US dollar or progress in trade talks could keep the metal under pressure.
