Investors assess flurry of economic data showing stalled inflation progress, suggesting Fed may tread cautiously on further rate cuts
28 November 2024 - 07:38
byDaksh Grover
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Bengaluru — Gold prices slipped on Thursday as the dollar strengthened, while investors assessed a flurry of economic data showing stalled inflation progress, suggesting the Federal Reserve might tread cautiously on further interest rate cuts.
Spot gold fell 0.3% to $2,627.60/oz by 3.02am GMT. US gold futures shed 0.5% to $2,627.00.
The dollar index was up 0.1%, reducing gold’s appeal for holders of other currencies.
The market was focusing on the Fed’s rate cuts, with the latest core personal consumption expenditures (PCE) data suggesting slowing inflation, leading to expectations that the Fed’s policy next year might be less dovish than previously expected, said Kelvin Wong, Oanda senior market analyst for Asia Pacific.
Meanwhile, the Fed’s struggle to bring inflation back to its 2% target, combined with the possibility of higher tariffs under the upcoming Trump administration may constrain the US central bank’s ability to implement rate cuts next year.
Markets now see a 64.7% chance of a quarter-point rate cut in December, as per the CME group’s FedWatch tool.
Elsewhere, Mexican President Claudia Sheinbaum warned of retaliation if Trump enforced a 25% tariff, citing potential US job losses and higher consumer prices.
Gold is regarded as a safe-haven investment during periods of economic or geopolitical instability, including trade wars.
Trading is expected to be thin with US markets closed on Thursday for Thanksgiving holiday.
In the short term, particularly over the next few days to two weeks, gold could come under further pressure. However, the longer-term bullish trend for gold remained intact, Wong said.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.10% to 878.55 metric tonnes on Wednesday.
Spot silver fell nearly 1% to $29.78/oz, platinum 0.1% to $928.05 and palladium was steady at $972.75.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Firmer dollar saps gold’s strength
Investors assess flurry of economic data showing stalled inflation progress, suggesting Fed may tread cautiously on further rate cuts
Bengaluru — Gold prices slipped on Thursday as the dollar strengthened, while investors assessed a flurry of economic data showing stalled inflation progress, suggesting the Federal Reserve might tread cautiously on further interest rate cuts.
Spot gold fell 0.3% to $2,627.60/oz by 3.02am GMT. US gold futures shed 0.5% to $2,627.00.
The dollar index was up 0.1%, reducing gold’s appeal for holders of other currencies.
The market was focusing on the Fed’s rate cuts, with the latest core personal consumption expenditures (PCE) data suggesting slowing inflation, leading to expectations that the Fed’s policy next year might be less dovish than previously expected, said Kelvin Wong, Oanda senior market analyst for Asia Pacific.
Meanwhile, the Fed’s struggle to bring inflation back to its 2% target, combined with the possibility of higher tariffs under the upcoming Trump administration may constrain the US central bank’s ability to implement rate cuts next year.
Markets now see a 64.7% chance of a quarter-point rate cut in December, as per the CME group’s FedWatch tool.
Elsewhere, Mexican President Claudia Sheinbaum warned of retaliation if Trump enforced a 25% tariff, citing potential US job losses and higher consumer prices.
Gold is regarded as a safe-haven investment during periods of economic or geopolitical instability, including trade wars.
Trading is expected to be thin with US markets closed on Thursday for Thanksgiving holiday.
In the short term, particularly over the next few days to two weeks, gold could come under further pressure. However, the longer-term bullish trend for gold remained intact, Wong said.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.10% to 878.55 metric tonnes on Wednesday.
Spot silver fell nearly 1% to $29.78/oz, platinum 0.1% to $928.05 and palladium was steady at $972.75.
Reuters
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