The FedWatch tool shows an 83% probability of a 50 bps rate hike in the December meeting
Tension in Poland cooled, as the country's prime minister said there was no evidence of a deliberate attack and therefore NATO's Article IV may not be activated. However, the authorities also pointed out that if it is determined that the perpetrator is Russia, it does not rule out triggering Article V of NATO, which allows each member state to decide how to react in response to armed attacks by other countries. Therefore, yellow metal safe-haven demand was reduced on waning fears of an escalation in the Russia-Ukraine conflict.
On the other hand, with optimist data from the US, the FedWatch tool now shows an 83% probability of the Fed raising interest rates by 50 basis points in the December meeting, while it was 85.4% before the data release. In addition, some Fed officials still emphasize continuing hawkish policies in their speeches. John Williams -Federal Reserve Bank of New York- emphasized the importance of restoring price stability. San Francisco Fed President Daly said that pause is off the table, and the reasonable interest rate range is 4.75% to 5.25%; He said that "interest rates will still need to be raised next year, and we are open to the possibility of raising interest rates by 50 basis points next month."
As a response, the US dollar index regained some of its yesterday lose, bouncing from a Thursday low of 105.84 to 106.62 on the early Friday Asian season. However, the US dollar index is going to print its fourth consecutive week of losses. As the USD tried to stabilize its foothold and USVIX fell back under 25, gold also gave back some of its earlier gains. From the technical point of view, as you can see in the below daily figure, 100 EMA at 1,713 is the key pivot, and by trading above this level, we can count on higher prices. On the flip side, bears can go further by breaching under this level.
