PT Rifan Financindo Berjangka – Gold Holds Steady as Inflation Data Released
Gold held steady for a second day, as investors weighed the outlook for U.S. interest rates after inflation data that supported the case for a rate cut next month.
Bullion traded near $2,635 an ounce, with pressure on the metal easing as the U.S. dollar rally lost steam. The U.S. dollar, which gained after President-elect Donald Trump’s victory, has weakened this week against other currencies amid month-end flows. A stronger dollar makes the metal more expensive for many buyers.
Traders also weighed Wednesday’s core personal consumption expenditures price index — the Federal Reserve’s preferred measure of underlying inflation — which rose in line with expectations. Investors are pricing in a 60% chance of a quarter-point cut next month, up from about the same chance earlier this week. Lower borrowing costs typically benefit gold, as it doesn’t pay interest. The print came after the release of the Fed’s November meeting minutes, where policymakers expressed confidence in the economy and easing inflation.
They indicated broad support for a cautious approach to future rate cuts. The bullion market was relatively calm after Monday’s 3.4% slump, which came amid news that Israel and the Lebanese militant group Hezbollah were preparing a 60-day suspension of hostilities that began Wednesday morning.
Easing geopolitical tensions typically weigh on gold, reducing its appeal as a safe-haven asset. Spot gold was little changed at $2,636.45 an ounce at 8:13 a.m. in Singapore. The Bloomberg Dollar Spot Index edged down 0.1% after dropping 0.7% in the previous session. Silver was steady, while platinum and palladium edged up.
Source: Bloomberg
Gold bounces back amid weak US Dollar, falling US yields
Gold prices recover on Wednesday after dropping to a weekly low of $2,605, bolstered by a soft US Dollar responding to the release of US economic data. This alongside falling US Treasury bond yields, spurred Gold’s recovery to current prices. The XAU/USD trades at $2,636 up by 0.13%.
The market mood turned slightly sour as US equity markets prepared for Thanksgiving. In the meantime, the Federal Reserve’s (Fed) preferred inflation gauge, the core Personal Consumption Expenditures (PCE) Price Index, justifies the Fed’s gradual approach, which is expected to lower borrowing costs at the December meeting.
Other data showed that the economy remains robust after the release of the second estimate of the third quarter’s Gross Domestic Product (GDP). At the same time, jobs data revealed that the labor market remains strong as the number of Americans applying for unemployment benefits dipped below estimates.
Following the data, US Treasury bond yields fell, dragging the Greenback lower. The US Dollar Index (DXY), which tracks the performance of six currencies against the buck, tumbled 0.78% to 106.04.
Bullion prices recovered despite Lebanon and Israel agreeing on a ceasefire. Nevertheless, the escalation of the Russia-Ukraine conflict could keep buyers leaning into the non-yielding metal, which posted weekly losses of over 2.90% despite advancing on Wednesday.
According to CME FedWatch Tool data, markets now see a 70% chance of a quarter-point rate cut in December. The non-yielding metal shines in lower interest rate environments. PT Rifan Financindo Berjangka.
Source: Fxstreet