Summary:
Gold hit a 2-week high on lower Indian demand. It rose for 2 weeks as the dollar and yields fell, driven by rate-cut expectations.
Despite falling demand in India, gold scaled a more than two-week high on Friday. Bullion has risen for a second week as the dollar and Treasury yields slipped on rising rate-cut expectations.
The core PCE price index, which excludes volatile food and energy prices was up 3.2% from a year ago, which fell short of analyst expectations for a gain of 3.3%, the Commerce Department reported Friday.
Markets reacted little to the report as traders laid back heading into the Christmas holiday. But they raised bets that the Fed will start cutting rates in March.
A combination of geopolitical tensions and continued central bank buying should see demand remain resilient next year, according to the WGC. Gold prices hit a record high earlier this month.
“In a year with major elections taking place globally, including in the US, Europe, Russia, India, and Taiwan, investors’ need for portfolio hedges will likely be higher than normal.”
However, the industry body note that a soft landing in the US which is anticipated by many economists historically boded ill for gold, resulting in flat to slightly negative returns in average.
Gold gained more momentum with bullish flag formed on the 1-hour chart. Holding above the trend lines signals the continuation of the expected rise by the end of the year.
Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
The yen hit a seven-week high on Wednesday as delays to tariffs on Canada and Mexico eased concerns about the Fed's ability to cut interest rates.
2025-02-05
The Canadian dollar steadied after rebounding from multi-year lows, while the US dollar dropped as Trump paused new tariffs on Mexico for one month.
2025-02-04
Gold prices fell in early Asian trade as the dollar strengthened following Trump's new tariffs on Canada, Mexico, and China.
2025-02-03
