Gold prices remain steady this Tuesday morning after yesterday’s rally on the back of the US ISM non-manufacturing PMI miss that reached fresh yearly lows – approaching contractionary territory. The US being a principally services funded economy meant the print brought significant downside for the US dollar and consequently upside for bullion.
The resultant impact on Fed funds futures (refer to table below) was a dovish repricing of interest rate expectations with a 75% probability of a rate pause next week.
