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.
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2024-09-05