Is Gold Predicting a 50-Point Rate Cut?

Gold surged to an all-time high before pulling back, as investors await the Federal Reserve’s first move to ease monetary policy in over four years.

Traders are pricing in a 67% chance of a 50-basis-point rate cut, according to CME’s FedWatch Tool. Yet, despite growing expectations of an aggressive start to the policy easing, gold has slipped 0.5%, paring last week’s gains to 2.9%.

Could we see more downside in gold if a 25-basis-point eventuates from the Fed? $2,530 could be a potential level of support in this scenario.

Technical indicators, including the Relative Strength Index (RSI), have eased from near-overbought levels but perhaps not enough to suggest a more significant decline in gold prices is imminent.