Gold Rebounds as Markets Bet on Looming Fed Rate Cut

Gold prices recovered part of their earlier losses on Tuesday, lifted by growing expectations that the Federal Reserve will cut interest rates at its upcoming meeting. After briefly dipping toward $4,181, the metal bounced back during US trading hours to trade near $4,225, supported by strong conviction across markets that a rate reduction is coming next week.

The precious metal’s recovery comes despite a mild rise in the US dollar and firmer Treasury yields, both of which typically pressure non-yielding assets like gold. At the same time, the broader market mood remains cautious, with global equities stabilizing after a sharp sell-off on Monday. This combination has kept gold steady but prevented a more aggressive push higher.

With no major US economic releases scheduled for Tuesday, intraday movement has been relatively subdued. Price action remains heavily influenced by dollar fluctuations and overall risk sentiment.

Recent US data has reinforced the case for easier policy. Manufacturing activity contracted for a ninth straight month, retail sales grew only modestly, business confidence softened, and private-sector job growth slowed noticeably. These signals of cooling economic momentum have strengthened market expectations for a rate cut, with traders pricing an 87% chance of a 25-basis-point reduction.

Attention now shifts to several key reports arriving later this week, including ISM Services data and ADP private-sector employment figures, followed by the Fed’s preferred inflation gauge—the PCE index—on Friday. These releases are expected to shape the market narrative heading into next week’s decision.

Longer-term sentiment toward gold also remains upbeat. Various institutional surveys show a strong belief that prices will continue climbing over the coming year, with many investors expecting the metal to approach or even surpass