Gold nears new record on expectations of U.S. rate cut

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Gold nears new record on expectations of U.S. rate cut

Gold prices rose on the first day of the last week of 2023,
as investors looked to a potential interest rate cut by the U.S. Federal Reserve in 2024,
as well as a weakening U.S. dollar.

 

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Conclusion

 

 

 

 

 

Details:

Gold prices continued to rise on the first day of the last week of 2023, nearing a new record high of $2,072.22, on track to record its first annual gain in three years. The data showing a decline in U.S. inflationary pressures has bolstered expectations of multiple rate cuts in 2024.

A report released last week showed that the core personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred inflation gauge, rose by a very small amount in November, just shy of the central bank’s target of 2%.

Markets now expect a 75% chance of a rate cut by the Federal Reserve by March 2024, which could benefit assets that do not offer yields, such as gold, despite some central bank officials ruling out early easing.

 

 

 

 

Conclusion:

Gold prices rose by 0.6% to $2,064.45 per ounce  after gaining 1.7% last week.
The Bloomberg Dollar Spot Index, which measures the dollar’s strength against a basket of currencies,
fell by 0.1%. Silver and palladium prices rose, while platinum prices remained flat.

 

 

Gold nears new record on expectations of U.S. rate cut