Gold struggles to capitalize on its modest intraday gains, though the downside seems limited.
Reduced bets for a December Fed rate cut act as a headwind for the non-yielding yellow metal.
Economic concerns weigh on the USD and could support XAU/USD amid the risk-off impulse.
Gold refreshes daily low as reduced Fed rate cut bets offset weaker USD, risk-off mood
Gold (XAU/USD) attracts some sellers following an intraday move higher to levels beyond the $4,200 mark and drops to a fresh daily low during the early part of the European session on Friday. A growing number of Federal Reserve (Fed) policymakers signaled caution on further easing amid the lack of economic data, prompting traders to trim their bets for another rate cut in December. This, in turn, is seen as a key factor acting as a headwind for the non-yielding yellow metal.
Investors, however, seem convinced that weakening economic momentum on the back of a prolonged US government shutdown could allow the Fed to ease monetary policy further. This, in turn, keeps the US Dollar (USD) depressed near a two-week low, touched on Thursday, and could support the Gold price. Apart from this, a generally weaker risk tone might contribute to limiting the downside for the safe-haven precious metal, warranting some caution for bearish traders.
Source: Fxstreet
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