2023-12-22 10:12:30
Main economic affairs
December 22, 2023
Homeland Today: Gold prices rose on Friday to their highest levels in about three weeks, with growing bets that the Federal Reserve (the US central bank) will lower interest rates at the beginning of the year, which pushed the dollar and bond yields to decline before the release of the expected US inflation data.
By 0513 GMT, gold in instant transactions rose 0.2% to $2048.99 per ounce, after recording earlier in the session its highest levels since the fourth of December. Gold has risen 1.5 percent so far this week.
US gold futures increased 0.5% to $2,060.50 an ounce.
“US Treasury yields are trending lower due to growing expectations that the Federal Reserve will make its first interest rate cut in March, and this is a positive catalyst for gold prices at the moment,” said Kelvin Wong, chief market analyst for the Asia-Pacific region at OANDA.
He added, “There are some purchases of gold, which is considered a safe haven, due to the problems in the Red Sea.”
The dollar index fell near its lowest level in five months, making gold more attractive to holders of other currencies, and 10-year US bond yields also hovered near their lowest level since July.
According to the CME Group’s FeedWatch tool, traders expect 83% of interest rates to be cut by March. Low interest rates reduce the opportunity cost of holding non-yielding gold.
All eyes are now on the November core PCE report, the Federal Reserve’s preferred measure of inflation, for further clues on the outlook for US interest rates. The report is scheduled to be released at 1330 GMT.
Traders expect the index to rise 3.3 percent on an annual basis, compared to 3.5 percent in October.
As for other precious metals, silver fell 0.1% to $24.38 per ounce. Platinum fell 0.1% to $962.28. Palladium fell 0.6% to $1,206.12. The three metals are heading for gains for the second week in a row.
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