Two Scenarios For Gold Next Week As Fed Reveals Its Hand

"Next week can play out one of two ways - the Federal Reserve introduces a 25-basis point rate cut and gold consolidates or the central bank doubles down on easing with a 50-basis point cut and gold rallies to new highs, analysts told Kitco News....All eyes turn to the Federal Reserve's rate decision next week, scheduled for Wednesday. Markets are currently pricing in a 78.6% chance of a 25-basis point cut and a 21.4% chance of a 50-basis point cut, according to the CME Group's FedWatch Tool. Markets are widely expecting for the Fed to begin its easing cycle, but what will matter the most is whether the central bank is embarking on a major easing cycle or just a couple of rate cuts....Overall, gold is expected to remain a great long-term buying opportunity to investors, 'Ultimately, any dip will be a buying opportunity for the longer-term ... Gold is very well supported due to global central banks shifting to this easing tone,' said TD Securities commodity strategist Ryan McKay. The U.S. GDP data from Q2, which came in slightly better-than-expected, will play a role in the Fed's decision, especially when it comes to inflation....A major cut by 50 basis points would see gold rally to fresh multi-year highs and test the $1,454 levels and possibly higher, according to analysts."