Gold holds steady amid muted activity on US Fed rate cut bets
GOLD prices were flat on Wednesday (Dec 27), as trading remained muted amid expectations of interest rate cuts by the US Federal Reserve in the first quarter of 2024 and a generally weaker US dollar.
Spot gold was steady at US$2,066.86 per ounce, as at 0150 GMT.
US gold futures rose 0.4 per cent to US$2,078.20 per ounce.
Bullion is on track to mark an over 10 per cent gain this year – its best since 2020 – on safe-haven inflows driven by wars in Ukraine and the Middle East, coupled with bets for a cut in US interest rates.
Last week’s cooler inflation data boosted financial market expectations for an interest rate cut from the Fed next March, with traders now pricing in about an 80 per cent chance, 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 ticked up by 0.1 per cent, holding near a five-month low, while it eyed its worst yearly performance since 2020.
A weaker US dollar makes gold more attractive for other currency holders.
Meanwhile, Australian shares rose to their highest level in 20 months as trade resumed after a long holiday weekend, with Wall Street’s strong gains overnight underpinning the market.
Spot silver rose 0.2 per cent to US$24.25 per ounce, while platinum was steady at US$978.56. Palladium fell 0.3 per cent to US$1,176.49.
Trading is expected to remain muted for the whole week as many traders are out for holidays globally until the New Year. REUTERS
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