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Gold prices remained steady near record highs during Asian trading on Wednesday, recovering some recent losses as traders continued to bet on further interest rate cuts by the U.S. Federal Reserve.
After hitting record highs in September, gold has since traded within a narrow range of $2,600 per ounce, with market participants adjusting to the expectation of a slower pace of rate cuts. This cautious outlook has strengthened the U.S. dollar, placing pressure on gold and other metal markets.
Despite the stronger dollar, markets still anticipate gradual rate cuts, which could provide a boost to gold and other non-yielding assets. This sentiment has kept gold prices close to their recent peaks.
Spot gold rose 0.2% to $2,667.07 per ounce, while gold futures for December delivery climbed by 0.2% to $2,683.95 per ounce in early trading.
Gold Remains Rangebound Near Record Levels
Over the past three weeks, gold prices have remained within a range, unable to break through to new highs as traders factored in a higher terminal rate for the Federal Reserve. Spot gold hit a record high of $2,685.96 per ounce in late September.
While geopolitical tensions in the Middle East initially triggered safe-haven demand for gold, this was offset by the strength of the U.S. dollar, driven by signs of resilience in the American economy.
Despite this, gold has posted impressive gains throughout the year, buoyed by the expectation that U.S. interest rates will eventually decline.
According to the CME Fedwatch tool, traders currently see a 91.1% probability that the Federal Reserve will implement a 25 basis point rate cut in November, a more modest cut than the 50 basis point reduction seen in September. There is also a slight chance that rates will remain unchanged.
