$PAXG Gold prices maintained a positive performance in early trading, with XAU/USD stabilizing around $4205, and market sentiment generally leaning towards optimism. Investors widely expect the Federal Reserve to announce a 25 basis point interest rate cut at its meeting this Wednesday to address the economic slowdown pressure from the continued cooling labor market.
The expectation of an interest rate cut is the core driver of current gold prices. With the latest employment data showing signs of a slowing labor market, the market believes the Fed needs to stimulate economic momentum by lowering policy rates. Lower interest rates directly reduce the opportunity cost of holding non-yielding assets, thus supporting gold. The key this week lies in the Fed's guidance on the future path of interest rates. If the rate cut statement is dovish, gold prices may continue to test key resistance levels; if the Fed remains confident in the economy, the dollar may strengthen in the short term, thus putting downward pressure on gold prices. Structural demand remains, but the short-term oscillating pattern is unlikely to change. #XAUUSD❤️ #FED
