Support
Gold near record highs as European session ends
Several major central banks, including the BoE and BoJ, are set to announce policy decisions
The Empire State Manufacturing Index for September unexpectedly rose to 11.5
Crude oil prices remained flat
US dollar lagged ahead of the Federal Reserve’s upcoming rate decision
The Empire State Manufacturing Index for September saw an unexpected rise to 11.5, beating forecasts of -4.75. This surprise boost suggests resilience in the manufacturing sector, despite broader economic uncertainties. Additionally, former New York Federal Reserve President William Dudley has recently expressed support for a 50-basis-point interest rate hike, indicating a potential shift in monetary policy discussions.
Currencies
At the start of the North American session, the Australian dollar emerged as the strongest performer, closely followed by the British pound. On the other hand, the US dollar lags behind, reflecting softer sentiment in the lead-up to the Federal Reserve's upcoming rate decision. Traders are monitoring the Fed's policy meetings closely, with expectations divided between a 25- and 50-basis-point rate adjustment.
Oil
Crude oil prices remained flat during the European session on Monday as weak economic data from China dampened demand expectations. The trajectory of oil prices for the rest of the week will largely depend on the Federal Reserve's decision on interest rates.
Gold
Prices are hovering just below their all-time high, exchanging hands around the $2,580 mark. The precious metal has benefited from a weaker-than-expected US Producer Price Index (PPI) for August, which softened inflation concerns. Growing expectations of a 50-basis-point Fed rate cut have also enhanced gold's appeal as a safe-haven asset. As of Monday’s European session, the likelihood of such a cut had surged to above 50%, up from just 15% a week earlier.
Global Central Banks
In addition to the Federal Reserve, several other major central banks, including the Bank of England (BoE), Bank of Japan (BoJ), Turkey, and South Africa, are scheduled to announce policy decisions this week. The broader global trend towards rate cuts, as central banks seek to manage inflation, could further fuel gold’s rally, especially if the consensus shifts towards more accommodative policies.
