Gold is heating up again ahead of the Fed meeting.
Gold prices edged higher on Monday, supported by a weaker US dollar amid market confidence that the Federal Reserve will cut interest rates at this week's policy meeting. Spot gold rose about 0.3% to US$4,212.70 per ounce at around 03:19 GMT, while US gold futures for December delivery were steady at US$4,241.30 per ounce. The US dollar itself weakened, approaching a one-month low touched on December 4, making dollar-priced gold more affordable for buyers outside the US.
KCM Trade Chief Market Analyst Tim Waterer explained that US core PCE inflation data came in without any major surprises and is seen as keeping the Fed on track for a rate cut this week. Expectations of looser monetary conditions are one factor driving the rise in gold prices. At the same time, US economic data is showing signs of slowing: consumer spending rose only moderately in September after three consecutive months of increases, the labor market is starting to weaken, and private payrolls recorded their biggest decline in more than two and a half years. Several dovish comments from Fed officials have also strengthened expectations of policy easing.
The CME's FedWatch tool now shows the market pricing in about an 88% chance of a 25 basis point interest rate cut at the Fed's December 9-10 meeting. Lower interest rates generally benefit non-yielding assets like gold because they lower the opportunity cost of holding the precious metal. Meanwhile, silver fell about 0.4% to US$58.06 per ounce after hitting a new record of US$59.32 per ounce on Friday. However, it still recorded a gain of more than 100% year-to-date and is considered by many market participants to be undervalued compared to gold. Among other precious metals, platinum rose 0.7% to around US$1,653.00, while palladium edged down 0.1% to around US$1,455.97 per ounce. (az)
Source: Newsmaker.id
