Mumbai, 10 Dec (Commoditiescontrol): Gold prices extended their upward momentum on Tuesday, supported by China's recent pledge to enhance policy measures aimed at boosting economic growth. The yellow metal also drew strength from the anticipation of U.S. inflation data, which could provide clarity on the Federal Reserve's interest rate strategy.
Spot gold rose 0.4% to $2,669.84 per ounce, while U.S. gold futures climbed 0.3% to $2,692.50. This follows Monday’s rally, which saw gold hit a two-week high after China’s central bank resumed its gold purchases, ending a six-month pause.
China’s Politburo announced plans to adopt “appropriately loose monetary policy” alongside a more proactive fiscal policy in 2024, aiming to revitalize the country’s economic growth. These measures have buoyed gold prices, as China remains the world's largest consumer of the precious metal.
Investors are now turning their attention to the U.S. Consumer Price Index (CPI) data for November, expected on Wednesday. Last week’s unexpectedly strong U.S. payrolls report has already fueled market expectations of a Federal Reserve rate cut at its upcoming meeting on December 18, with odds standing at 85.8%, according to the CME FedWatch tool.
In Europe, the European Central Bank is also expected to lower rates by 25 basis points during its policy meeting on Thursday, which could further support gold. Lower interest rates generally benefit gold by reducing the opportunity cost of holding the non-yielding asset.
In other developments, the United States and the United Kingdom announced a new wave of sanctions targeting the illicit gold trade, which could impact global gold markets.
Among other metals, spot silver rose 0.6% to $31.98 per ounce, platinum held steady at $940.15, and palladium gained 0.3% to reach $976.25.
With global monetary policies leaning toward easing and geopolitical actions affecting the gold trade, the precious metals market remains closely tied to macroeconomic and geopolitical developments.
(By Commoditiescontrol Bureau: 09820130172)
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