Gold price continues to be weighed down by a pickup in the USD demand and risk-on mood

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  • Traders closed out some profitable Trump trades, which triggered a US Dollar corrective decline from a four-month high and provided a goodish lift to the Gold price on Thursday.
  • The USD decline remained uninterrupted after the Federal Reserve decided to lower its benchmark overnight borrowing rate by a 25 basis point, to a target range of 4.50%-4.75%. 
  • In the accompanying policy statement, Fed officials justified the easing mode as they view supporting employment becoming at least as much of a priority as arresting inflation.
  • Furthermore, Fed Chair Jerome Powell, during the post-meeting press conference, failed to offer cues that the central bank may pause rate cuts in the near term amid sticky inflation. 
  • According to the CME Group's FedWatch Tool, traders are pricing in 75% odds the Fed will cut rates again in December, leading to a further decline in the US Treasury bond yields.
  • Donald Trump's presidential election victory fueled speculations about economic policy shifts that could increase deficits and inflation, and restrict the Fed's ability to cut rates.
  • Meanwhile, hopes for an announcement of additional stimulus from China after a five-day meeting of the Standing Committee of the NPC remains supportive of the upbeat mood.



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