As investors wait keenly to hear from the US Federal Reserve on interest rate cuts, gold prices rose to their highest on Friday 22 December since the beginning of December, with sentiment pushing bond yields and the dollar to a positive standpoint to enter 2024.
Gold prices rising again after 2-week low
The markets are eager to see the November core personal consumption expenditure (PCE) price index report, due early this afternoon, which will disclose the Fed’s take on underlying inflation. Having said that, Fed officials deflected the notion of quickfire rate cuts in Q1 2024, but this does not seem to have deterred the market outlook.
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Kelvin Wong Source: LinkedIn
Kelvin Wong, a senior market analyst for Asia Pacific at OANDA, stated:
US real yields have been ticking downwards because of increasing expectations for the first rate cut from Fed to come in March and that is a positive catalyst for gold prices right now. Also, there is some safe-haven buying coming due to issues in the Red Sea.
Silver gained ground with a 0.2% rise to $24.44 per ounce, while platinum gained 0.3%. Spot gold also rose 0.2%, registering at $2,048.99 per ounce, its highest increase since 4 December. CME FedWatch tool suggested that investors and traders alike are betting on an 83% chance of Fed rate cuts by March 2024.
