04.12.202313:03:00UTC+00Gold Slips After Rising To Fresh Peak On Rate Cut Bets

Gold prices touched an all-time high of $2,151.20 in early trading, fueled by hopes of faster-than-expected rate cuts by the Fed. The rally comes close on the heels of Fed Chair Jerome Powell's speech on Friday where he stated that inflation was moving in the right direction. Despite Powell dismissing rate cut talks as premature, markets perceived the speech as dovish, spurring a bullish momentum in the prices of the yellow metal.

However, the rally was short-lived and Gold Futures prices for February settlement dropped to a low of $2,075.25, before recovering to its current level of $2,077.40. At its current price, the yellow metal has lost 0.59 percent on an overnight basis.

A surge in the Dollar abetted the precious metal's decline. The Dollar Index which measures the Dollar strength against a basket of 6 currencies increased to a day-high of 103.52, from the low of 103.06 in early trade.

The bullish momentum for Gold comes amidst a sharp rise in the rate cut expectations of interest rate traders as revealed in the CME FedWatch tool. The tool shows a close to 60-percent probability for rate cut in the March 2024 FOMC review. It was less than 22 percent a week earlier. The tool also shows a close to 88-percent probability for rate cut in the May 2024 review, up from less than 53 percent a week earlier.

Spot Gold shed 0.67 percent to trade at $2,058.32 per troy ounce. The day's trading range has been between $2,056.13 and $2,148.78. The 52-week trading range was between $1,765.32 and $2,148.78.