S&P 500 — US Large Cap Index
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IPC Index — Mexico Market- Gold price drifts higher to around $4,230 in Monday’s early Asian session.
- Rising Fed rate cut bets support the Gold price.
- The potential of a Ukraine peace deal might cap the yellow metal’s upside.
Gold price (XAU/USD) trades in positive territory near $4,230 during the early Asian trading hours on Monday. The precious metal edges higher amid growing speculation that the US Federal Reserve (Fed) may cut interest rates in December. Traders await the release of the US ISM Manufacturing Purchasing Managers Index (PMI) report for November later on Monday.
Expectations of continued monetary policy easing by the Fed have been a primary driver of the yellow metal price. Traders increase their bets on a December rate cut following recent weaker US economic data and dovish remarks from Fed policymakers. According to the CME FedWatch Tool, financial markets are now pricing in nearly an 87% probability of a rate cut at the conclusion of the Fed’s December 9-10 meeting, up from a 71% chance a week ago. Lower interest rates could reduce the opportunity cost of holding Gold, supporting the non-yielding precious metal.
The US ISM Manufacturing PMI will be published later in the day, which is expected to ease slightly to 48.6 in November from 48.7 in October. In case of a stronger-than-expected outcome, this could lift the US Dollar (USD) and weigh on the USD-denominated commodity price in the near term.
Optimism surrounding peace talks between the United States and Ukraine could reduce gold’s appeal as a safe-haven asset. The Guardian reported on Sunday that US Secretary of State Marco Rubio said a meeting between the US and Ukrainian officials was “very productive,” but more work remains to be done towards ending Russia’s war in Ukraine. US President Donald Trump’s special envoy, Steve Witkoff, will travel to Moscow to meet Vladimir Putin later this week.
