Gold hits five-week high toward $4,264 fueled by Fed cut frenzy
Gold (XAU/USD) extends its gains for the second consecutive trading session on Monday, up over 0.40% as money markets priced in a rate cut by the Federal Reserve (Fed) in the next week. Meanwhile, the US Dollar weakness keeps the yellow metal underpinned at around $4,240 at the time of writing after reaching a five-week high of $4,264.
Bullion holds firm despite BoJ tightening risk, weaker Chinese physical demand
The yellow metal remains upward biased, but central bank tightening, particularly from the Bank of Japan (BoJ) following comments from Governor Kazuo Ueda, and a split Federal Open Market Committee (FOMC) are the main risks for bullion’s advance. Despite this, last week, Gold rallied over 3.75% and seems poised to challenge the $4,300 toward year’s end.
Data-wise, the Institute for Supply Management (ISM) revealed that manufacturing activity in November contracted for the ninth consecutive month. Further data, revealed by the ISM, showed that input prices are rising and that the labor market continues in a low-firing, low-hiring environment.
Meanwhile, physical demand for Gold in China has deterred buyers due to high prices, leading to hundreds of store closures, according to the Financial Times.
Ahead of this week, the US economic docket will feature the ADP Employment Change, the ISM Services PMI, Initial Jobless Claims and the Fed’s preferred inflation gauge release, the Core PCE.
Source: FXStreet.com
