Gold Price News: Gold Drifts Lower In Subdued Trading

Gold prices edged lower on Tuesday, adding to Monday’s losses, which came after a volatile day in the wider global stock markets.

Gold prices fell as low as $2,382 an ounce on Tuesday, compared with around $2,410 an ounce in late trades on Monday.

There were few apparent drivers to significantly affect gold markets on Tuesday, leaving prices to drift slightly lower in largely lacklustre trading. The subdued trading activity contrasted sharply with Friday last week when prices hit a fresh all-time high of $2,486 an ounce.

Tuesday’s market seemed like the ‘calm after the storm,’ which followed Monday’s stock market panic, which may have prompted some precious metals traders to liquidate gold positions amid margin calls on equity positions, according to some observers.

On the monetary policy side, the interest rate markets are now fully bracing for a start to interest rate cuts by the US Fed at its next meeting on 18th September, and data from traders indicates a more than 65% probability of a 50-basis point cut, and a 34% chance of a smaller cut of 25 basis points.

And looking further out, the markets appear to expect several cuts by the end of the year amounting to a full 100-basis point cut from the current 5.25%, according to data from the CME FedWatch tool: CME FedWatch – CME Group.

The outlook for looser monetary policy provides a supportive element for gold as a non-yield-bearing asset, and this factor has combined with strong central bank buying to deliver a positive performance for the yellow metal in 2024 so far, with a gain of just over 16%.