Gold hits near three-week high on US Fed rate-cut bets
GOLD prices climbed on Friday (Dec 22) to their highest level in nearly three weeks, as rising bets of US Federal Reserve interest rate cuts early next year pushed the US dollar and bond yields lower ahead of much awaited US inflation data later in the day.
Spot gold was up 0.1 per cent at US$2,047.42 per ounce, as at 0109 GMT, after hitting its highest since Dec 4 earlier in the session. Bullion has risen 1.4 per cent so far this week.
US gold futures rose 0.4 per cent to US$2,058.80 per ounce.
The US dollar index languished near a five-month low, making gold more attractive for other currency holders, while benchmark US 10-year bond yields hovered near their lowest level since July.
Data showed US gross domestic product increased at a 4.9 per cent annualised rate last quarter, revised down from the previously reported 5.2 per cent pace, while weekly jobless claims increased slightly.
The market is now pricing in an 83 per cent chance of a Fed rate cut by March, compared with 79 per cent before the US economic data, according to the CME FedWatch tool.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Lower interest rates decrease the opportunity cost of holding non-yielding bullion.
Fed officials have been pushing back against the idea of rapid rate cuts next year, but those remarks have done little to change investor sentiment.
All eyes are now on the November core personal consumption expenditure (PCE) index report due at 1330 GMT, the Fed’s preferred measure of underlying inflation, for more clarity on US interest rate outlook.
Expectations are for the core PCE price index to have risen 3.3 per cent on an annual basis, compared to October’s 3.5 per cent.
Spot silver was steady at US$24.39 per ounce, while platinum eased 0.2 per cent to US$961.56 and palladium was flat at US$1,213.19. REUTERS
Share with us your feedback on BT's products and services
