The price of gold increased by 0.35%, partially offsetting yesterday's 0.84% drop. The price recovery was caused by increased expectations of easing of the Fed's monetary policy, as well as increased geopolitical tensions in the Middle East.
The negative dynamics of the US currency also supported gold. The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) fell by 0.23% to 106.20.
Market participants are also preparing for the publication of US statistical data (job openings report, ADP employment report and non-farm payrolls), which may clarify further actions by the Fed. A number of Fed officials, including Chair Jerome Powell, are also scheduled to speak this week. Yesterday, Fed Governor Christopher Waller said, with inflation still forecast to fall to 2%, he is inclined "at present" to support another rate cut later this month. According to the CME FedWatch Tool, markets see a 74.5% probability of a 0.25% rate cut in December (compared to 59.4% a week ago), while the probability of an additional rate cut in January is only 14.3%. Non-yielding assets like bullion thrive in a lower interest rates environment and amid geopolitical uncertainties.