Gold prices continue to rise, will the expectation of Fed rate cuts and uncertainties support the trend?

Spot gold is trading around $4,315 during Monday’s Asian trading session, maintaining above the $4,300 level. The market is analyzing that the continued preference for safe assets is due to the Federal Reserve’s signals of additional easing and global uncertainties. However, if hawkish statements from senior Fed officials lead to a strengthening dollar, there is a risk of decline in dollar-denominated assets like spot gold.

Global Risks Stimulating Safe Asset Demand

As uncertainties increase, investors’ risk aversion toward safe assets is resurging. The shooting incident at Bondi Beach in Sydney, Australia, has amplified risk sentiment in the global markets, leading to an inflow of funds into spot gold. With these adverse factors accumulating, demand for gold as a safe asset is expected to persist for the time being.

Fed Policy Path Diverges Internally

There is a noticeable divergence within the Fed regarding interest rate outlooks. Chicago Fed President Austin Goolsby commented that, amid delays in key economic indicators caused by the government shutdown, “we should have been more cautious and held off on further cuts, waiting for more data.”

Meanwhile, Cleveland Fed President Bess Hahamek maintained that the current high interest rates are essential to curb inflation. These conflicting views are likely to be reflected in the FOMC minutes.

Weekly Highlights and Dollar Volatility

This week, the delayed October Non-Farm Payrolls (NFP) report( is scheduled for release on Tuesday, making it a key catalyst for short-term direction in the gold market. Statements from Fed officials Steven Miran and John Williams of the New York Fed are also important checkpoints.

If hawkish comments from senior Fed officials are more aggressive than expected, the dollar could rebound, potentially putting short-term pressure on XAU/USD. With the Fed having previously cut)0.25%(, bringing the policy rate to the 3.50%–3.75% range, whether additional easing will follow or if the current level will be maintained will likely influence the future trend of gold.