Gold Rallies as Fed Rate Cut Expectations Boost EUR/USD

Gold prices have surged above $2,650 per ounce, gaining 1.2% as renewed Federal Reserve rate cut expectations weaken the US dollar across major pairs. EUR/USD benefited from dollar weakness, climbing 0.4% to test resistance at 1.0780 as traders price in a more dovish Fed trajectory. Market sentiment shifted following softer US economic indicators that reinforced expectations for monetary policy easing in early 2025. The US Dollar Index (DXY) retreated from recent highs, falling 0.5% to 105.20. Bitcoin also capitalized on dollar weakness, advancing 2.3% to $71,500. Technical analysis shows EUR/USD approaching the 50-day moving average at 1.0800, which represents a key resistance level. Gold's breakout above $2,650 signals potential for further gains toward $2,700 if rate cut expectations persist. The correlation between precious metals and risk assets suggests improving market sentiment regarding future monetary accommodation.