After the European Central Bank's rate cut yesterday, the euro surged significantly, driving gold up as well. On one hand, this is due to the reverse impact of the ECB's decision being finalized. On the other hand, some traders speculate that since Europe cut rates by 60 basis points, the U.S. Federal Reserve might follow. As a result, the likelihood of a 50 basis point rate cut by the Fed shot up to 43% this morning, causing the dollar to drop and gold to spike. However, Europe cut the less critical refinancing rate, while the more important deposit rate was only cut by 25 basis points. Given the core CPI, PPI, and unemployment data, the Fed is still likely to cut rates by 25 basis points. Thus, the recent surge in gold lacks strong support and may lead to a sharp drop following this rapid rise.

XAU/USD today status according to market's news

Sep 13 2024