Gold Up Amid Interest Rate Cut Hopes, Palladium Tests 1,400

Gold is trading positive amid dollar weakness on speculations for a rate cut in the next FOMC meeting.
Mauricio Carrillo
Gold Up Amid Interest Rate Cut Hopes, Palladium Tests 1,400
Gold Up Amid Interest Rate Cut Hopes, Palladium Tests 1,400

A pause in the global equities’ rally and speculations for a rate cut soon in the Federal Reserve are hurting the dollar and fueling precious metals such as gold and palladium.

Gold is trading positive on Monday after two negative days as investors are getting back on the metal due to concerns over the US-China trade war and speculations that a rate cut by the Federal Reserve will put the dollar down.

Palladium, on the other hand, is testing the 1,400 area after posting five days of gains.

Precious metals report for Wednesday, June 12

Gold is extending its bounce from 1,320 as the metal is posting gains on Wednesday. It is now trading as high as 1,335, recovering almost all loses suffered in the last two days.

Silver is trading positive for the second day, but the gains are limited as the metal is contained by the 200-day moving average at 14.90.

Copper is negative on Wednesday as the unit was unable to sustain gains at 2.7000. XCU/USD is extending losses to 2.6450 as it is heading to test the 2.6000 support.

Palladium is trading in consolidation mode after five days of gains versus the dollar that brought the pair from 1,320 to today’s fresh highs since April 29 at 1,405.

Platinum stopped its recovery from the 800.00 area at 820.00 as it got a rejection that sent it back to 810.00, where it is currently moving.

The rate cut is coming

Market’s experts are more and more convinced about a rate cut by the Federal Reserve in the coming months and even weeks.

Recently, Treasury Secretary Steven Mnuchin said that falling bond yields are indicating that the Federal Reserve will cut interest rate, instead of warning a recession.

“I would say that the bond markets are predicting a lowering of interest rates,” Mnuchin said. At the same time, he affirmed the Treasury does see “no signs of a recession.”

Speculations are pilling up about a rate cut in the next FOMC two-day meeting on June 18-19.

Gold jumps amid rate cut speculations

XAUUSD daily chart June 12

Gold is extending its bounce from 1,320 to trade near to the 1,340 area as investors are leaving the dollar behind as they do believe a Fed’s rate cut will happen as soon as June 19.

In this framework, XAU/USD is trading 0.50% positive on the day at 1,333 as the unit is taking a breath after the recent upside movement.

According to FX Empire analyst James Hyerczyk, “so far this week, the dollar has remained steady against a basket of major currencies. If it suddenly weakens, then gold prices could surge above last week’s high at $1352.70.”

To the upside, 1,345 and 1,350 are the levels to watch. Above there, 1,360 and the multi-year highs at 1,365 will be exposed.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US