Gold climbs to three-week high as US rate cut bets firm
GOLD prices climbed to a three-week high on Thursday (Dec 28) as the US dollar and bond yields touched multi-month lows on mounting bets that the US central bank will start to cut interest rates as early as March next year.
Spot gold was up 0.5 per cent at US$2,086.66 per ounce, as at 0211 GMT, hitting its highest since Dec 4, when prices raced to a record high of US$2,135.40.
US gold futures rose 0.2 per cent to US$2,097.10 per ounce.
Bullion looked set to log its best year in three with a 14 per cent gain, as the war in Ukraine and tensions in the Middle East boosted safe-haven inflows and bets of US rate cuts lifted the metal’s appeal.
Bets for interest rate cuts from the US Federal Reserve have firmed following cooler inflation data, with traders now pricing in an 88 per cent chance of monetary policy easing in March, according to the CME FedWatch tool.
Lower interest rates decrease the opportunity cost of holding non-yielding bullion.
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The US dollar index slipped to a five-month low and was set for its worst yearly performance since 2020, while benchmark US 10-year bond yields languished near their lowest level since July.
Meanwhile, London’s gold price benchmark hit an all-time high of US$2,069.40 per troy ounce at an afternoon auction on Wednesday, the London Bullion Market Association said.
Spot silver rose 0.8 per cent to US$24.44 per ounce and was poised to end the year with a near 2 per cent annual gain.
Platinum rose 0.2 per cent to hit a more than six-month high of US$999.00. Palladium climbed 0.9 per cent to US$1,163.91, but was on track for its biggest yearly decline since 2008. REUTERS
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