Escalating geopolitical tension and the expectation of another rate cut by the Fed next week supports the metal
11 December 2024 - 08:08
byRahul Paswan
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Bengaluru — Gold prices scaled a two-week peak on Wednesday, supported by escalating geopolitical tension and the expectation of another rate cut by the US Federal Reserve next week, and ahead of the closely watched US inflation report later in the day.
Spot gold was up 0.2% at $2,698.47/oz 2.53am GMT, and hit its highest since November 25. US gold futures rose 0.6% to $2,734.70.
Investors’ focus is on the US consumer price index (CPI), which is expected to have risen by 0.3% in November. The data could help set expectations for the Fed’s 2025 policy.
“An expected [CPI] number pretty much gives the Fed the green light to cut [interest rates] next week and that might be the catalyst we need to see for gold,” said Kyle Rodda, financial market analyst at Capital.com.
The Fed is likely to cut rates by 25 basis points (bps) on December 18, according to 90% of economists polled by Reuters, with most expecting a pause in late January amid concerns over inflationary risks.
On the geopolitical front, the Israeli military said it struck most of the strategic weapons stockpiles in Syria and hit two Syrian navy facilities, while the South Korean police raided the presidential office over martial law, Yonhap news agency reported.
Gold is considered a safe investment during economic and geopolitical turmoil and tends to thrive in a low-interest-rate environment.
Central bank buying, monetary policy easing and geopolitical tension have propelled bullion to multiple record highs this year, putting it on track for its best year since 2010, with a nearly 31% increase so far.
Goldman Sachs on Tuesday reiterated its bullish stance on prices and pushed back on the argument that bullion cannot rally to $3,000/oz by end-2025 in a world where the dollar stays stronger.
Spot silver added 0.1% to $31.93/oz, platinum gained 0.5% to $947.55 and palladium rose 0.7% to $975.19.
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 climbs to two-week high
Escalating geopolitical tension and the expectation of another rate cut by the Fed next week supports the metal
Bengaluru — Gold prices scaled a two-week peak on Wednesday, supported by escalating geopolitical tension and the expectation of another rate cut by the US Federal Reserve next week, and ahead of the closely watched US inflation report later in the day.
Spot gold was up 0.2% at $2,698.47/oz 2.53am GMT, and hit its highest since November 25. US gold futures rose 0.6% to $2,734.70.
Investors’ focus is on the US consumer price index (CPI), which is expected to have risen by 0.3% in November. The data could help set expectations for the Fed’s 2025 policy.
“An expected [CPI] number pretty much gives the Fed the green light to cut [interest rates] next week and that might be the catalyst we need to see for gold,” said Kyle Rodda, financial market analyst at Capital.com.
The Fed is likely to cut rates by 25 basis points (bps) on December 18, according to 90% of economists polled by Reuters, with most expecting a pause in late January amid concerns over inflationary risks.
On the geopolitical front, the Israeli military said it struck most of the strategic weapons stockpiles in Syria and hit two Syrian navy facilities, while the South Korean police raided the presidential office over martial law, Yonhap news agency reported.
Gold is considered a safe investment during economic and geopolitical turmoil and tends to thrive in a low-interest-rate environment.
Central bank buying, monetary policy easing and geopolitical tension have propelled bullion to multiple record highs this year, putting it on track for its best year since 2010, with a nearly 31% increase so far.
Goldman Sachs on Tuesday reiterated its bullish stance on prices and pushed back on the argument that bullion cannot rally to $3,000/oz by end-2025 in a world where the dollar stays stronger.
Spot silver added 0.1% to $31.93/oz, platinum gained 0.5% to $947.55 and palladium rose 0.7% to $975.19.
Reuters
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