Gold Eases on Outlook of Hawkish Fed
Gold erased its earlier gain and eased to the $2,640 per ounce mark on Friday, trimming gains from the week as markets heeded hawkish expectations from the Fed.
New data by the ISM showed that manufacturing orders and production expanded in December, potentially anticipating the recovery for the sector after a long period of underperformance. The survey also flagged factories’ concerns over tariffs by the incoming presidential administration, adding to pro-inflationary risks that may prevent the Fed from extending its cutting cycle.
Markets now show a loose split between one and two rate cuts by the central bank for the whole year. In turn, bullion prices remained supported by looser monetary policy elsewhere and a wave of central bank buying. The PBoC signaled that it will reduce the rate on its key reverse repo facility this year. This was after the central bank disclosed another month of bullion buying.
Source : Trading Economics
