Spot gold rose 0.5 percent to $2,001.97 an ounce, up more than 1 percent so far this week. The settlement price in US gold futures rose 0.5% to $2,003.00.
The dollar index is deteriorating due to weaker data released this week that would turn the Fed into a more dovish hub and then could serve as a supportive wind for gold in 2024. Chicago.
The dollar index fell 0.4 percent and is heading for its second weekly decline on growing expectations that the Federal Reserve could start cutting interest rates by May next year. Commerzbank said in a note: “Ultimately, the latest economic data was somewhat disappointing.”
Commerzbank expects the first rate cut to be implemented in the middle of next year, and only then is the price of gold likely to rise permanently above $2,000. Traders broadly expect the Fed to leave interest rates unchanged in December, while expecting a roughly 64% chance of a cut as early as May.
We don’t see a major short-term upward or downward move until next year, and it is becoming more certain that the US central bank is ready to cut interest rates and possibly cut interest rates significantly before we reach the 2% inflation target. Bart Millick, Head of Commodity Strategy at TD Securities, said
Lower interest rates reduce the opportunity cost of holding non-interest-generating gold. Spot silver gained 2.7 percent to a 12-week high of $24.3 an ounce. Platinum rose 1.6 percent to $930.61 and palladium rose 2.2 percent to $1,068.83 an ounce, both heading for their second weekly gain.
Gold gains range from tensions to optimism about global economic growth
Spot gold closed with a weekly gain of almost 1.10% at $2,002.85, as traders looked to a potential pivot from the Fed. The metal rose 0.60%.
Data from the US Purchasing Managers’ Index (S&P Global) was released. The US Manufacturing PMI (preliminary for November) came in at 49.40, lagging behind expectations of 49.90, however, the Services Composite PMI and Composite PMI at 50.80 and 50.70, respectively, exceeded the estimates of 50.30 and 50.40 respectively. US Dollar Index Fell Despite Generally Encouraging US Data on Risk Sentiment as Markets Rise The broadest. The US dollar index fell 0.34% to close at 103.42 on Friday.
The index fell 0.50% for the week. Soft fall notions and better-than-expected European PMIs are also hurting the dollar.
US 10-year bond yields at 4.47% rose by two basis points on Friday, rising about 1% for the week. Similarly, two-year bond yields rose two basis points on Friday and closed up 1.25% for the week to close at 4.96%.
Total gold ETF holdings globally fell by 0.06 million ounces in the week ended November 23. Gold buyers are looking forward to the possibility of a Fed turnaround next year, which will maintain demand for the metal. Markets expect the Fed’s first rate cut in May.
However, given the fact that geopolitical tensions are receding and the latest European and US PMIs have been encouraging, the metal is overly stretched. In addition, core inflation data for personal consumption expenditures in the United States remains at double the Fed’s target of 2%.
