PT Rifan Financindo Berjangka – Gold price surge on risk aversion and overcome strong USD
Gold price climbs extending its gains for the third straight day, shrugs off a buoyant US Dollar as risk aversion boosts safe-haven assets. The golden metal has risen over 3.40% during the week, with buyers eyeing the $2,700 mark. The XAU/USD trades at $2,650, up 0.69%.
Bullion’s decline toward a two-month low of $2,536 can mainly be attributed to investors booking profits after President Donald Trump’s victory in the US elections. Fears that some of his proposals could spark a reacceleration of inflation sent US Treasury yields soaring and underpinned the Greenback.
Nevertheless, Bullion prices had risen due to the escalation of the Russia-Ukraine conflict.
On Tuesday, Russian President Vladimir Putin authorized the use of nuclear weapons in retaliation to the West. Reports revealed the White House authorized Ukraine’s use of American weapons inside Russia, according to officials.
In the meantime, the American currency advances 0.51% in the day, according to the US Dollar Index (DXY), which tracks the buck’s performance against six other peers. The DXY is at 106.69 after sinking to a five-day low of 106.11.
Recently, Fed Board Governors Lisa Cook and Michelle Bowman failed to clarify the outcome of the December Federal Open Market Committee (FOMC) policy meeting.
Cook remains confident the Fed will lower inflation toward the 2% goal, but she didn’t reveal whether she will support a rate cut next month. Bowman added that despite seeing “considerable progress” on inflation, it seems to have “stalled in recent months,” meaning the Fed should be cautious. She commented that neutral rates could not be as low as expected, by some officials at the FOMC.
Traders trimmed the chances for a 25 basis points rate cut at the December meeting. The CME FedWatch Tool sees a 55% probability of lowering rates, down from a 58% chance a day ago.
Ahead of this week, the US economic schedule will feature Initial Jobless Claims, S&P Global Flash PMIs, and the University of Michigan (UoM) final reading of Consumer Sentiment for November. (Cay) Newsmaker.id
Source: Investing.com
Gold gains for third consecutive day on escalating Russia-Ukraine tensions
Gold prices climbed for a third consecutive session to mark a one-week high on Wednesday, as investors sought refuge in the safe-haven metal amid mounting geopolitical unease fuelled by escalating Russia-Ukraine tensions.
Spot gold was up 0.6% at $2,647.43 per ounce as of 01:42 p.m. EST (1842 GMT), after hitting its highest level since Nov. 11 earlier in the session. U.S. gold futures settled 0.8% higher at $2,651.70.
Geopolitical tensions intensified as Russian President Vladimir Putin lowered the threshold for a nuclear strikes in response to a broader range of conventional attacks.
The dollar rebounded, reviving the “Trump Trade” rally after a three-day slide, limiting gains in dollar-priced gold by making it costlier for overseas buyers. Last week, gold saw its steepest weekly drop in over three years as the dollar index hit a one-year high.
Investor attention is also fixed on several Federal Reserve officials who are set to speak this week. Market expectations for a December rate cut have declined significantly, with odds now at 55.7%, down from 82.5% just a week ago.
Brokerages see U.S. President-elect Donald Trump’s proposed tariffs to fuel volatility across global markets, spurring inflationary pressures and, in turn, limiting the scope for major central banks to ease monetary policy.
Bullion is considered a hedge against inflation, but higher rates reduce the appeal of holding the non-yielding asset.
Among other metals, spot silver fell 0.9% to $30.92 per ounce, platinum shed 1.8% to $956.87 and palladium lost 1.8% to $1,016.73. PT Rifan Financindo Berjangka.
Source : Reuters