Gold Rises to Over 1-Month High
Gold rose past $2,715 per ounce on Wednesday, gaining traction to extend its two-day rally after the lack of upside surprises for US inflation consolidated bets of an incoming rate cut by the Fed.
Headline inflation inched higher to 2.7% in November, as expected by markets, and annual core inflation remained unchanged at 3.3%. Consequently, rate traders increased positions that reflect a 25bps rate cut by the Fed next week. Still, lingering concerns that price growth may remain stubborn next year limited a further increase, as annual services inflation and other key underlying inflation gauges like shelter inflation, remained firmly above the 4.5% mark.
In turn, the Bank of Canada cut its key rate by 50bps for a second decision, and the ECB and SNB are both expected to extend their cutting cycles. Additionally, the PBoC resumed gold purchases after a six-month pause and pledged to shift its monetary policy stance to be more accommodative next year.
Source: Trading Economics
