Gold continues to rise on expectations of rate cuts

Dollar decline, U.S. Treasury bond rise support precious metal

Gold prices rose on Wednesday, hitting their highest level in six months
after comments from Federal Reserve officials boosted bets that
the U.S. central bank could start cutting interest rates next year.

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The details

Gold prices

The details

The U.S. dollar fell against most major currencies, and U.S. Treasury bond prices rose
after Federal Reserve Governor Christopher Waller said that U.S. monetary policy is working well to bring inflation back to the central bank’s 2% target, suggesting that there may be no need to raise interest rates again.

Typically, the impact of lower borrowing costs is negative for non-yielding bullion, but in the current environment, expectations of rate cuts could support gold prices, as investors view the precious metal as a safe haven in the event of an economic recession.

Gold prices

Gold prices have risen more than 12% since early October, driven by safe-haven buying following the conflict between Israel and Hamas, and investors’ expectations of U.S. rate cuts.

As investors prepare for U.S. inflation data, traders are leaning towards an economic slowdown and monetary easing.

Spot gold rose 0.4% to $2,048.29 an ounce at 9:19 a.m. Singapore time. The Bloomberg Dollar Spot Index fell further after dropping 0.4% in the previous session. Silver, platinum and palladium prices also rose.

Gold continues to rise on expectations of rate cuts

Gold continues to rise on expectations of rate cuts

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