Mumbai, 11 Dec (Commoditiescontrol): Gold prices climbed to a two-week peak on Wednesday, buoyed by heightened geopolitical tensions and growing expectations of another interest rate cut by the U.S. Federal Reserve. The rise came ahead of the much-anticipated U.S. inflation data release, which could shape monetary policy for the coming months.
Spot gold edged up by 0.1% to $2,696.82 per ounce, while U.S. gold futures gained 0.3% to $2,726.00 per ounce. Investors are keenly awaiting the U.S. Consumer Price Index (CPI) data, scheduled for release later in the day, and the Producer Price Index (PPI) report due on Thursday. Both reports are expected to influence expectations for future Federal Reserve decisions.
Market analysts note that traders are pricing in an 86% probability of a 25-basis-point interest rate cut during the Fed’s December 17-18 meeting, according to the CME FedWatch tool. A poll revealed that 90% of economists expect the Fed to proceed with the cut, although many anticipate a pause in January due to concerns about inflation risks.
Geopolitical developments also contributed to gold’s appeal as a safe-haven asset. The Israeli military reported significant strikes on strategic weapons depots and naval facilities in Syria, escalating regional tensions. Gold often thrives in times of economic or geopolitical uncertainty, especially when interest rates are low, as it becomes a more attractive investment compared to interest-bearing assets.
This year, central bank purchases, monetary easing, and geopolitical instability have driven gold prices to multiple record highs, positioning the precious metal for its strongest annual performance since 2010. Gold has surged nearly 31% in 2024 so far, reflecting robust investor demand.
Meanwhile, Goldman Sachs reiterated its bullish forecast for gold, dismissing skepticism about the metal’s ability to reach $3,000 per ounce by the end of 2025, even in a strong-dollar environment.
In other precious metals, spot silver inched up by 0.1% to $31.93 per ounce, platinum remained steady at $943.15, and palladium advanced 0.4% to $971.44.
By Commoditiescontrol Bureau: 09820130172)
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