Gold Holds Near Peak, Market Confident Fed Rate Cut
Global gold prices held steady at around US$4,150-$4,160 per troy ounce on Thursday morning, after rising nearly 1% the previous day. This strengthening was supported by growing expectations that the US Federal Reserve will cut interest rates again at its December meeting. Derivatives market participants now estimate an 80% chance of a quarter-point rate cut, and the latest jobless claims data is considered insufficient to derail such a move.
Several dovish comments from Fed officials have bolstered sentiment for monetary easing. At the same time, Kevin Hassett, US President Donald Trump's top economic adviser, has begun to emerge as a leading candidate for the next Fed chairman. This figure is seen as in line with Trump's desire to keep interest rates lower. For gold, a low interest rate environment is always good news because the precious metal offers no yield.
In terms of performance, gold has posted a nearly 60% increase since the start of the year and is on track for its best annual performance since the late 1970s. Prices briefly touched a record high last month before correcting, but remain above the psychological level of US$4,000 per ounce. Remaining strong interest from central banks and inflows into gold-based ETFs have provided important support amidst the outflow of funds from government bonds and some currencies.
However, the rate of inflows into gold ETFs has slowed in the past three weeks and has tended to remain flat. Analysts from Standard Chartered believe this pattern could signal that gold's short-term price floor is beginning to weaken. They believe gold prices are currently in a waiting pattern, consolidating in the upper range while awaiting new triggers, whether from economic data or the next Fed policy decision.
At the start of the Asian session, gold prices barely moved compared to the previous close, while the US dollar index also remained flat after weakening 0.3% the previous day. Among other precious metals, silver stabilized after surging 3.7% and approaching a record high, palladium continued to strengthen, while platinum remained flat. The combination of falling yields, expectations of lower interest rates, and interest in asset diversification keeps gold positioned as one of the primary defensive assets in the global market.(asd)
Source: Newsmaker.id
