Gold prices moved sideways as investors considered the decline of global stocks, concerns about the over- Valuation of technology stocks and expectations of weakening the US Federal Reserve (FED) to soon cut interest rates.
Spot gold prices remained around $4,070/ounce, after rising 0.6% in the previous session. Nvidia's "tailor-made" profit report released on Wednesday is considered an important test for investor sentiment, especially for stocks related to artificial intelligence. Although gold often benefits from market fluctuations and increased sentiment, the precious metal may also be under short-term pressure as investors are forced to pay leverage positions.
Speeches by some Fed officials have recently weakened expectations for a US rate cut, although this is often a supportive force for gold non-yielding assets. The interest rate swap market currently only reflects a 50-50 chance of the Fed cutting interest rates in December, rather than almost certain a 25 basis point cut as two weeks ago.
An important signal about the health of the US labor market is expected to appear on Thursday, when the Bureau of Labor Statistics (BLS) released its September employment report. Although the data is outdated, the report will still help clarify the picture of the world's largest economy after 6 weeks of government closures, which have caused a series of economic reports to be delayed.
Gold prices have risen by about 55% since the start of the year, heading for their biggest year since 1979, despite a slight correction after the peak set last month. Gold's momentum comes from large central bank purchases and the trend of investors seeking protective barriers against public debt risks and currency fluctuations.
According to a survey by Bank of America, global investors predict that gold will be the second most profitable asset next year, behind only the Yen among major currencies.
The Fed's policy is also being closely watched as the minutes of the Federal Open Market Committee (FOMC) meeting on October 28-29 will be released later on Wednesday. The minutes may reveal when the Fed will start expanding its accounting balance sheet through purchases to serve reserve management. The addition of liquidity to the financial system and the ability to rotate the axis to loosen currency can bring advantages to the precious metal.
In Singapore, at 11:25 a.m., gold increased by 0.2% to 4,076.34 USD/ounce. Bloomberg Dollar spot Index is flat. Silver increased slightly, while palladium and platinum decreased slightly.
