Gold has resumed a positive movements, driven by the recent weakness of the U.S. dollar and the decline in Treasury yields. On Thursday, the precious metal recovered from its three-week low.
However, the outlook for gold remains complex. The potential re-election of Donald Trump adds pressure to prices, not only for gold but also for Latin American currencies, creating uncertainty among traders.
In this scenario, all eyes are on the Federal Reserve, which could become a new source of volatility in global markets today. A 25-basis-point rate cut is anticipated, a move that could boost gold if the environment becomes more favorable for non-yielding assets.
Jerome Powell’s speech will be crucial. A dovish tone could increase gold’s appeal. Conversely, if Powell takes a more hawkish stance, the dollar might strengthen, negatively impacting both the precious metal and international currencies.
The evolution of gold will primarily depend on the Fed’s stance in the coming hours. A dovish tone could bring gold back to key levels, while a more restrictive stance could limit the metal’s upside potential. Additionally, with persistent uncertainty, gold will continue to serve as a barometer of risk appetite in international financial markets.
