Gold steady around $2,500 ahead of key US data – London Business News | Londonlovesbusiness.com

Gold continued to trade sideways around the USD 2,500 mark on Tuesday as traders anticipate the results of the Federal Reserve meeting.

The monetary policy decision could drive volatility in the market in case of a surprise. Market expectations continue to point to a 25 basis point reduction, but some investors anticipate a larger cut.

More favorable upcoming economic data could support it.

Key indicators such as the US CPI data on Wednesday and the PPI figures on Thursday should provide more insights into the direction of inflation and could impact the Fed’s decisions. However, recent mixed jobs market data, including the NFP report, raised concerns about the US economy and fueled caution among investors.

Weaker-than-expected inflation data could support expectations for a larger rate cut, potentially up to 50 basis points. Such a move could provide further upside momentum for gold prices as declining interest rates could drive treasury yields and the dollar lower.

At the same time, strong central bank demand and inflows into global gold ETFs could continue to support gold. Traders could also monitor the developments surrounding the US elections and could react to the debate between both candidates.