Investors are showing a preference for the gold metal as they speculate against future interest rate increases in the United States and the prospect of a dovish stance from the Fed in 2024.
Palladium is also seeing growth, rising 1.8% to $1,056.26 an ounce, on track for its best week in more than a year.
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He gold shine this Friday when you reach its highest level in two weeks, marking its first weekly rise in three weeks. This trend is caused by growing expectations in the market, which suggest that the United States Federal Reserve has concluded with rising interest ratesputting pressure on the dollar and Treasury yields.
The price of spot gold rises 0.5%, reaching US$1,991.48 per ounce, showing an increase of 2.8% so far this week. Meanwhile, US gold futures also rose 0.4%, reaching US$1,994.70.
Investors are showing a preference for gold as they speculate against future interest rate increases in the United States and the prospect of a dovish stance from the Fed by 2024, according to Carlo Alberto De Casa, market analyst at Kinesis Money. Declining interest rates reduce the opportunity cost of holding gold, an asset that does not generate returns but is used as a hedge against inflation.
Gold: the data that the market expects
Consideration of possible rate cuts from May next year is increasing after data showing a slowdown in inflation. In October, the US consumer price index remains unchanged and the underlying index increases less than expected. In addition, producer prices register the largest drop in three and a half years.
The dollar leads to a weekly drop, which makes gold is more affordable for buyers using other currencies, while the 10-year Treasury yield also declines.
However, analysts at Commerzbank note that gold’s rally is unlikely to continue, arguing that “it will probably take some time before the market completely turns around and starts speculating on possible US rate cuts.”
In the precious metals market, spot silver rises 1.9%, reaching $24.14 per ounce, showing an increase of 8.5% over the week. For its part, platinum rose 1.3% to $903.81, accumulating an increase of 7.6% for the week.
Palladium is also seeing growth, rising 1.8% to $1,056.26 an ounce, on track for its best week in more than a year.
Source: Ambito
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