Gold climbs as the Fed becomes more interested in rate-cut wagers

 Gold climbs as the Fed becomes more interested in rate-cut wagers

On Friday, gold reached a two-week high, marking its second weekly increase in as many weeks, as the US Treasury yield and the dollar declined in tandem with growing predictions of a Federal Reserve interest rate drop.

On Friday, gold reached a two-week high, marking its second weekly increase in as many weeks, as the US Treasury yield and the dollar declined in tandem with growing predictions of a Federal Reserve interest rate drop.

With the dollar and US Treasury yields down due to growing anticipation that the Federal Reserve would reduce interest rates early next year, gold reached its highest level in over two weeks on Friday. This was the second week in a row of gains for the metal.

As of 3:50 p.m. ET (20:50 GMT), spot gold was up 0.4% at $2,052.69 an ounce, its best level since December 4. This gave it a 1.7% weekly gain.

US gold futures increased to $2,069.1 by 0.9%.

According to Tai Wong, an independent metals trader located in New York, "precious metals, including gold, are being driven higher on forecasts of a Fed cut in March and a very forceful rate cut in 2024 with a total market price of 150 bps in 2024."

"It's priced to perfection but the market usually discounts it very enthusiastically."

Given that official statistics indicated price pressures were muted last month, traders on Friday conjectured that the US central bank would begin reducing rates in March.

November saw a decline in annual US inflation below 3% and a continuation of the easing of underlying pricing pressures.

Gold became more appealing to overseas purchasers when the dollar index dropped to a level close to a five-month low. The yield on the benchmark 10-year bond was likewise almost at its lowest point since July.

Philip Strible, chief market analyst at Blue Line Futures in Chicago, said that fears about an economic slowdown and the US dollar index, together with lower Treasury rates, would continue to strengthen gold.

In fact, the present technical breakthrough may drive prices in the direction of $2,100. That recent contract high may be retested in this case.

Physical demand for gold in India declined precipitously as a result of rising local pricing.

The price of silver dropped 1.2% to $24.12 an ounce after reaching a two-week high. Palladium reached its highest point since October 2 and was down 0.9% at $1,202.46.

Platinum reached a high since September 1 of $969.67, up 0.7%. For the second week in a row, all three metals saw increases.