Gold Holds onto Gains ?

Gold Preserves Gains?

At the start of the trading day on Monday, gold prices were flat to slightly lower, with XAUUSD settling at $3,645/oz. There will likely be some consolidation this week as traders get ready for what could be the most significant Fed event of the year.
The head of the Federal Reserve, Jay Powell, will take the podium on Wednesday to explain the actions the Fed is taking to help the economy. I would like to know if the officials are in agreement about the first interest rate cut of the year and if there will be more cuts before the year ends.
What does everyone think? At the current price, a 25-basis-point drop to 4.25%. If the planned cut in interest rates on loans goes through, it will help the economy and who knows, it might even keep gold’s rise going. But there’s a catch: This Pump, Why?
For weeks, gold has been rapidly rising in price. Since August 20, the value of bullion has increased by over 10%. For a commodity that normally stays away from extreme volatility and large price spikes, this is an exceptionally steep increase. What gives, then?
Since the opportunity cost of gold decreases in an environment with lower interest rates, the expectation of such rates is driving up the price of gold. Put simply, as the yield on fixed-income assets decreases, it becomes more appealing.
As an example, when interest payments on Treasuries decrease as a result of reduced interest rates, gold tends to seem better.

Let us now revert to the opposing side. The significant rise in gold prices over the past month may suggest that market players have already accounted for the interest rate reduction. The adage “Buy the rumor, sell the news” is a well-known financial maxim that should be disregarded. The gold price could fall if markets really do receive the rate cut and decide to cash out. However, markets worldwide should brace themselves for volatility regardless of the result of that major meeting.
Prepare your stops and keep an eye out for trading chances in the gold, stock, cryptocurrency, and foreign exchange markets. If nothing else, what else can influence the price of gold this week? Before Wednesday’s interest rate decision, Tuesday’s retail sales might serve as a springboard.