Gold Edges Higher as Traders Weigh Mixed US Data, Rate Outlook
Gold prices edge higher as mixed US data fuels optimism for a rate cut by the Federal Reserve. Investors await the Fed’s final policy meeting of 2024, with gold on track for its biggest annual gain since 2007.
Gold Edges Higher as Traders Weigh Mixed US Data, Rate Outlook
Gold prices edged higher on December 12, 2024, as traders digested mixed U.S. economic data and turned their attention to the Federal Reserve’s final policy meeting of the year. The precious metal traded near $2,687 an ounce, recovering from a 1.4% drop on Thursday following reports that U.S. wholesale inflation unexpectedly accelerated in November, and jobless claims rose to a two-month high.
Despite the short-term volatility, gold is poised to notch a weekly gain as optimism builds that the U.S. central bank will implement a 25-basis-point rate cut in its upcoming meeting. The expectation is that the Fed may pause its rate cuts early in 2025, which has stirred positive sentiment for gold. Lower borrowing costs typically support gold prices, as the metal does not yield interest.
The World Gold Council’s latest report suggests that while gold’s growth is expected to slow in 2025, concerns about U.S. growth and inflation under a potential Donald Trump presidency will likely temper further gains, presenting a complicated outlook for U.S. interest rates. However, gold’s performance in 2024 has been stellar, with the metal surging approximately 30% year-to-date, heading for its largest annual gain since 2007. This rally has been driven by the Federal Reserve’s easing policies, safe-haven demand, and sustained central bank buying.
As of 5:43 a.m. in London, spot gold was 0.3% higher at $2,689.37 an ounce, on track for a 2% weekly gain. Meanwhile, silver saw a slight dip, while platinum and palladium remained steady. The Bloomberg Dollar Spot Index was unchanged, after gaining 0.3% in the previous session.
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