Daily Digest Market Movers: Gold price continues to draw support from a combination of factors ahead of Fed

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  • Bets for a more aggressive policy easing by the Federal Reserve will assist the gold price in attracting some dip-buyers on Wednesday and stall the overnight modest pullback from the vicinity of the all-time peak. 
  • According to CME Group's FedWatch Tool, the markets are currently pricing in a 65% chance that the US central bank will lower borrowing costs by 50-basis points at the end of a two-day meeting later today.
  • The yield on the benchmark 10-year US government bond bounced from a 16-month low following the release of US Retail Sales data on Tuesday, albeit lacks follow-through and caps the US Dollar recovery. 
  • The US Census Bureau reported that Retail Sales in the US rose 0.1% in August as compared to a decline of 0.2% expected, while sales excluding Autos missed consensus estimates and expanded by 0.1%. 
  • The upbeat data prompted some intraday USD short-covering move and pushed it away from the lowest level since July 2023, though the positive move runs out of steam amid dovish Fed expectations. 
  • At least nine people were killed in simultaneous explosions of handheld pagers used by Hezbollah members in Lebanon, raising the risk of a broader Middle East war and underpinning the safe-haven metal. 

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