Gold steadies as inflation data fuels rate cut bets
Gold prices held steady on Thursday, paring losses from earlier in the session, as softer-than-expected U.S. inflation figures reinforced expectations of Federal Reserve rate cuts in 2026.
Spot gold was down 0.1% at $4,333.57 an ounce as of 1424 GMT. U.S. gold futures also eased 0.2% to $4,366.80.
U.S. consumer prices rose 2.7% year-on-year in November, data showed, falling short of the 3.1% increase forecast by economists polled by Reuters. Futures on the federal funds rate factored in a slightly increased chance of the Federal Reserve trimming interest rates at its January meeting, after the data.
"(The CPI) report was dollar negative and gold positive... and really, the Fed is going to remain in focus going into 2026 as the market attempts to figure out how many rate cuts are on tap for next year," said David Meger, director of metals trading at High Ridge Futures.
Non-yielding assets such as gold typically benefit in a lower-interest-rate environment.
Traders expect 63 basis points of rate cuts by the Federal Reserve next year, according to data compiled by LSEG. FEDWATCH/
U.S. President Donald Trump said on Wednesday the next Federal Reserve chair will be someone who supports sharply lower interest rates, with an announcement expected early next year.
Meanwhile, spot silver fell 0.4% to $66.04 an ounce, retreating from a record high of $66.88 in the previous session.
"Both gold and silver have seen magnanimous runs over the course of the last several weeks, so it's not surprising to see the market go through a bit of profit taking or consolidation," Meger said.
Silver has outperformed gold this year, climbing 129% year-to-date on investment demand and concerns over a supply deficit.
Source: Reuters.com
