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GOLD: Consolidating As Fed Cut Expectations Pared

GOLD
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Gold has extended Monday’s weakness in today’s Asia-Pac session. 

  • Bullion closed 0.4% lower on Monday as market participants continued to adjust to Friday's strong September jobs report and price out aggressive rate cut expectations.
  • Fed funds futures have not only taken out risks for a 50bp cut next month but now reflect the chance of no action. The implied November contract shows -19bps in easing, with December at -44bps.
  • Lower rates are typically positive for gold, which doesn’t pay interest.
  • There was limited reaction to Fed speakers yesterday. MN Fed President Kashkari said risks of higher inflation are waning as he defended his 50bp rate cut decision, seeing a neutral rate at around 3%.
  • We have limited US data today, with the focus on the minutes for the September FOMC tomorrow, CPI on Thursday and PPI on Friday.
  • According to MNI’s technicals team, gold remains in consolidation mode, although the trend condition is also unchanged, and bulls are still in the driver’s seat. The focus remains on $2,690.2 next, a Fibonacci projection. Firm support lies at $2,615.4, the 20-day EMA.
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Gold has extended Monday’s weakness in today’s Asia-Pac session. 

  • Bullion closed 0.4% lower on Monday as market participants continued to adjust to Friday's strong September jobs report and price out aggressive rate cut expectations.
  • Fed funds futures have not only taken out risks for a 50bp cut next month but now reflect the chance of no action. The implied November contract shows -19bps in easing, with December at -44bps.
  • Lower rates are typically positive for gold, which doesn’t pay interest.
  • There was limited reaction to Fed speakers yesterday. MN Fed President Kashkari said risks of higher inflation are waning as he defended his 50bp rate cut decision, seeing a neutral rate at around 3%.
  • We have limited US data today, with the focus on the minutes for the September FOMC tomorrow, CPI on Thursday and PPI on Friday.
  • According to MNI’s technicals team, gold remains in consolidation mode, although the trend condition is also unchanged, and bulls are still in the driver’s seat. The focus remains on $2,690.2 next, a Fibonacci projection. Firm support lies at $2,615.4, the 20-day EMA.