Gold continues shallow recovery on Fed rate-cut bets

Gold continues to snake higher on Thursday as markets price in higher probabilities of the Fed cutting interest rates in December.

A softening of Trump’s rhetoric on tariffs is a possible factor in the falling interest rate expectations. 

XAU/USD is technically crawling up a major trendline but remains vulnerable to further breakdowns.

Gold (XAU/USD) extends its shallow recovery from Tuesday’s lows as it trades in the $2,640s on Thursday. The yellow metal is seeing gains on the back of cementing market bets that the Federal Reserve (Fed) will go ahead and cut US interest rates at its December meeting. Lower interest rates are positive for Gold as they reduce the opportunity cost of holding the non-interest-paying asset, making it more attractive to investors. 

Gold’s gains may be limited, however, by receding geopolitical risks after Israel and Hezbollah agreed on a 60-day ceasefire deal on Tuesday, although sceptics say it will remain unsustainable without an end to hostilities in Gaza, according to Bloomberg News.