Metal rises, while traders await US inflation data for further insights into the Fed’s interest rate outlook
10 December 2024 - 07:38
byRahul Paswan
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Bengaluru — Gold prices extended gains on Tuesday, buoyed by top consumer China’s pledge to ramp up policy stimulus to help spur economic growth, with investors awaiting US inflation data for further insights into the Federal Reserve’s interest rate outlook.
Spot gold had gained 0.4% to $2,669.84/oz by 2.48am GMT. US gold futures rose 0.3% at $2,692.50.
Gold hit a two-week high on Monday, supported by China’s central bank resuming purchases after a six-month hiatus.
The country would also adopt “appropriately loose monetary policy” next year, alongside a more proactive fiscal policy to spur economic growth, the Politburo was quoted as saying.
This is “a shift from a ‘prudent’ stance that has been held for nearly 14 years. Hence, a further reduction of interest rates in China may spur higher demand for gold purchases,” said Kelvin Wong, Oanda senior market analyst for Asia-Pacific.
“Secondly, the safe-haven demand narrative has resurfaced as China has started a probe into the US AI [artificial intelligence] juggernaut Nvidia over an alleged violation of anti-monopoly law, suggesting more tit-for-tat measures may arise between the US and China.”
Traders are now focused on US inflation data for November after last week’s stronger-than-expected payrolls report boosted the chances of a Fed rate cut next week.
The odds of a quarter-point rate cut on December 18 are currently at 85.8%, according to the CME Fedwatch tool.
The European Central Bank is also expected to cut rates by a quarter point at its policy meeting on Thursday.
Gold, which pays no interest, tends to benefit from lower interest rates as this reduces the opportunity cost of holding bullion.
Elsewhere, the US and Britain have announced a new wave of sanctions targeting illicit gold trade.
Spot silver added 0.6% to $31.98/oz, platinum steadied at $940.15 and palladium was up 0.3% to $976.25.
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.
Gold gains on Chinese stimulus plans
Metal rises, while traders await US inflation data for further insights into the Fed’s interest rate outlook
Bengaluru — Gold prices extended gains on Tuesday, buoyed by top consumer China’s pledge to ramp up policy stimulus to help spur economic growth, with investors awaiting US inflation data for further insights into the Federal Reserve’s interest rate outlook.
Spot gold had gained 0.4% to $2,669.84/oz by 2.48am GMT. US gold futures rose 0.3% at $2,692.50.
Gold hit a two-week high on Monday, supported by China’s central bank resuming purchases after a six-month hiatus.
The country would also adopt “appropriately loose monetary policy” next year, alongside a more proactive fiscal policy to spur economic growth, the Politburo was quoted as saying.
This is “a shift from a ‘prudent’ stance that has been held for nearly 14 years. Hence, a further reduction of interest rates in China may spur higher demand for gold purchases,” said Kelvin Wong, Oanda senior market analyst for Asia-Pacific.
“Secondly, the safe-haven demand narrative has resurfaced as China has started a probe into the US AI [artificial intelligence] juggernaut Nvidia over an alleged violation of anti-monopoly law, suggesting more tit-for-tat measures may arise between the US and China.”
Traders are now focused on US inflation data for November after last week’s stronger-than-expected payrolls report boosted the chances of a Fed rate cut next week.
The odds of a quarter-point rate cut on December 18 are currently at 85.8%, according to the CME Fedwatch tool.
The European Central Bank is also expected to cut rates by a quarter point at its policy meeting on Thursday.
Gold, which pays no interest, tends to benefit from lower interest rates as this reduces the opportunity cost of holding bullion.
Elsewhere, the US and Britain have announced a new wave of sanctions targeting illicit gold trade.
Spot silver added 0.6% to $31.98/oz, platinum steadied at $940.15 and palladium was up 0.3% to $976.25.
Reuters
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