Gold extends recovery on rate cut expectations
Gold’s price (XAU/USD) edges higher for the third day in a row and recovers initial weekly losses, rising above the $2,700 level at the time of writing on Thursday. The recovery comes in the run-up and release of the December US Consumer Price Index (CPI) data on Wednesday.
While headline CPI accelerated compared to the previous month, core inflation rose at a slower pace than in November, which increased the probability of a 25 basis point (bps) rate cut by the Federal Reserve (Fed) in June. According to the CME FedWatch tool, the odds of interest rates being lower than current levels after the June meeting stand at 63.8%, compared to 57.3% before the inflation data and 51.4% on Monday.
On the economic data front, the US Initial Jobless Claims for the week ending January 10 and US Import/Export and Retail Sales data for December are due on Thursday. Meanwhile, US Treasury yields are falling further, with the US 10-year benchmark trading below 4.70%.
Source: FXstreet
