The price of gold fell by 0.3%, retreating from a new historical high reached yesterday. The decline in prices was caused by partial profit-taking, as well as the correction of positions by investors ahead of tomorrow's Fed decision.
Meanwhile, the weakening of the US currency and the fall in US bond yields limited the decline in precious metal prices. 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 0.08% to 100.69.
As for the Fed meeting, its results will be announced tomorrow at 18:00 GMT, with an interest rate cut all but guaranteed. This will be the first easing of monetary policy since the Fed began raising interest rates in March 2022. But the key question remains how significant the Fed's rate cut will be. According to the CME FedWatch Tool, markets see a 67% probability of a 0.5% rate cut in September (up from 34% the week before), and a 33% probability of a 0.25% rate cut (down from 66% the week before). Investors will also be looking out for clues about the outlook for interest rates, especially if any further cuts could come this year.
Meanwhile, today market participants will analyze August retail sales and industrial production data, as well as the NAHB housing market index for September. Economists expect retail sales to fall 0.2% m/m, industrial production to rise 0.2% m/m and the NAHB housing market index to rise to 40 from 39 in August.