Gold Price Forecast: Gold price (XAU/USD) continued to rise and touched around $4,140 during early Asian trading on Wednesday. The yellow metal gained strength as traders increased their bets that the US Federal Reserve (Fed) could cut interest rates by the end of this year.
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All eyes are now on the Fed officials’ speeches later today. Several Fed members including John Williams, Anna Paulson, Christopher Waller, Raphael Bostic, Stephen Miran, and Susan Collins are scheduled to speak, which could give hints about future policy direction.
On Tuesday, data from Automatic Data Processing (ADP) showed that private sector job creation fell by an average of 11,250 per week for the four weeks ending October 25. This weak job growth contrasts with earlier October figures and signals a possible slowdown in the US job market.
The softer employment numbers increased hopes that the Fed may introduce more policy easing, which is positive for gold prices. According to the CME FedWatch tool, markets are now pricing in a 68% chance of a 25 basis point rate cut in December, with the probability rising to around 80% by January. Lower interest rates generally make gold more attractive since it does not offer a yield.
Meanwhile, traders are also watching news about a possible deal to end the US government shutdown. A Bloomberg report said that the US Senate passed a temporary funding bill supported by eight centrist Democrats, which could keep the government open till January 30. If the shutdown issue is resolved soon, demand for safe-haven assets like gold may fall slightly.
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