Gold prices traded steady just below the all-time highs on Thursday, as traders turned their focus towards speeches from key U.S. Federal Reserve officials, including Fed Chair Jerome Powell.
His pre-recorded remarks, expected later on Thursday, are seen as pivotal for gauging the size of the next interest rate cut.
Markets were currently pricing in a 62% probability of a 50 basis points (bps) rate cut by the Fed in November. Recent dovish commentary from Fed Governor Adriana Kugler, who expressed strong support for the Fed’s decision to reduce rates by half a point last week, has further fueled expectations. Kugler also signalled that she would back additional rate cuts in the future.
These comments, combined with weaker-than-expected U.S. consumer confidence and regional economic activity data, have strengthened the case for another substantial rate cut at the upcoming policy meeting.
Early Thursday, optimism surrounding China’s stimulus measures and expectations of a dovish Fed have checked the U.S. Dollar's recovery, which in turn has provided minor support to gold prices.
In addition to the Fed's comments, U.S. economic data including Durable Goods Orders, final Q2 Gross Domestic Product (GDP), and weekly Jobless Claims will offer further direction for gold.
The U.S. Personal Consumption Expenditures (PCE) Price Index, set for release on Friday will also be closely watched.
