The Federal Reserve’s minutes revealed divisions among policymakers over possible rate cuts, adding to the market’s unpredictability.
The CME Group’s FedWatch Tool shows a 63% probability of a 0.25% rate cut at the December meeting. Investors now await key US inflation and third-quarter GDP figures for further direction.
Geopolitical dynamics increase the demand for gold
Gold prices are also responding to increased geopolitical tensions. Escalations in the conflict between Russia and Ukraine, including reported drone attacks and advanced missile deployments, have increased demand for gold as a hedge against risk.
In addition, new US President Donald Trump’s proposed tariffs on imports from Canada, Mexico and China have created additional uncertainty on global markets. This uncertainty is encouraging a broader shift to gold among investors looking to protect their portfolios.
Outlook: Key drivers for the gold price
The combination of dollar weakness, uncertainty about Fed policy and geopolitical risks continues to support gold prices. However, resistance around $2,645 suggests further gains could be limited without a clear catalyst.
Traders are watching the release of the Personal Consumption Expenditure (PCE) price index and preliminary third-quarter GDP data for clues about the Fed’s policy direction.