Gold price attracts some buyers on Tuesday. The precious metal edges higher amid concerns about the US Federal Reserve's independence after the report that US President Donald Trump says he is removing Fed Governor Lisa Cook.
Spot Gold trades near its Friday peak at $3,378.91, consolidating gains yet confined to a tight intraday range at the beginning of the week. The US Dollar (USD) posted a modest intraday advance at the beginning of the day, a corrective advance that followed last week's sell-off. Still, the American currency had little scope for a steady advance following the United States (US) Federal Reserve (Fed) Chair Jerome Powell's announcement at the Jackson Hole Symposium.
Powell surprised market players by being much more dovish than usual, and pretty much hinting at upcoming rate cuts. Market players are now betting on a roughly 85% chance of a 25 basis points (bps) trim in September. Investors are also increasing bets of another 25 bps cut when the Fed meets in December.
Other than that, the week will be lighter ahead of the monthly close, with the focus on the US July Personal Consumption Expenditures (PCE) Price Index, scheduled for the upcoming Friday. The Fed's favorite inflation measure is foreseen little changed from July and holding below the 3% mark on a yearly basis.
Also, with the Fed's future action seen clearly, investors may shift their attention to the trade-war front. US President Donald Trump has been relatively quiet on the matter, more centered on the Russia-Ukraine war. About the latter, hopes for a resolution continue to fade.
source: Fxstreet
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