The price of gold increased by 0.3% after falling by 3.45% yesterday amid profit-taking, news of the appointment of the US Treasury secretary and a decrease in geopolitical tensions in the Middle East.
Some support for the precious metal was provided by statements by Donald Trump, who promised to impose tariffs on all imports from Canada, Mexico and China, which increased fears about trade wars. Gold has traditionally been considered a safe haven asset during periods of economic and geopolitical uncertainty, including trade wars and other conflicts.
The focus was also on the prospects for the Fed's monetary policy. Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, said he is ready to support another rate cut next month. According to the CME FedWatch Tool, markets see a 59.6% probability of a 0.25% rate cut in December (compared to 58.9% a week ago). Minutes of the Fed's last meeting, which will be presented today, will offer more color on the decision to cut by 0.5% and the discussion for future easing. US data expected this week (GDP report for the 3rd quarter, as well as the personal consumption expenditure price index (the Fed's preferred inflation indicator) for October), will further refine the outlook for rates. Non-yielding assets like bullion thrive in a lower interest rates environment and amid geopolitical uncertainties.