• Gold bounces after the Reserve Bank of New Zealand implements a super-sized interest-rate cut, continuing the global trend.  
• Neutral or dovish Fedspeak from a string of Fed officials further supports the precious metal.
• Technically, XAU/USD enters a short-term downtrend, biasing price action to further losses.  

Gold (XAU/USD) trades back in the $2,610s on Thursday after bouncing off the psychological $2,600 level, as the yellow metal gets an uplift from the general slide in global interest rates and a string of Federal Reserve (Fed) officials strike a neutral or dovish tone at their speaking engagements. 

Gold gets a lift from mega-sized RBNZ rate cut

Gold rebounded overnight after the Reserve Bank of New Zealand (RBNZ) became the latest major central bank to slash interest rates. The RBNZ implemented a super-sized 50 basis points (bps) cut to its official cash rate, bringing it down to 4.75% from 5.25% previously, at its October meeting. Lower interest rates are bullish for Gold because they reduce the opportunity cost of holding a non-interest-paying asset. 

The RBNZ move helps rescue Gold from a bad start to the week in which it has lost almost 1.50% so far, mainly on the back of a brighter outlook for the US economy. This, in turn, has radically reduced bets that the Federal Reserve (Fed) will implement another double-dose 50 bps rate cut of its own at its next meeting in November. 

The market-based probability of the Fed lowering by 50 bps (0.50%) has now fallen to zero, according to the CME Fedwatch tool. The chances of a smaller 25 bps cut meanwhile stand at about 85%. Further – from a cut of some magnitude being inevitable – the probability of the Fed doing nothing in November has now increased to about 15%.