The movement in the precious metal comes amid global economic sentiment hit by a weakening US dollar and speculation about a more dovish policy stance by the Federal Reserve. The Comex gold market has been fueled by these expectations. According to forecasts from CME's Fedwatch tool, there is about a one-third chance that the Federal Reserve will begin cutting interest rates as early as March of next year, with the balance expected by the end of 2023.
Further affecting market dynamics is lower-than-expected US bond yields, which are currently lower than Fed interest rates. What's different is that this has brought up discussions about the possibility of demonetization in the near future. Adding to the global economic story are China's pledges to argue for fiscal measures to strengthen the economic recovery. These solutions are spearheaded by the initiatives of Finance Minister Lan Fo'an.
However, the cautionary tone was also struck by Richmond Fed President Thomas Barkin, who warned against a slow assessment of the timing of the cake that could require prolonged high interest rates.
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