Gold faces a decline, but its demand throughout the year reflects a favorable balance driven by lower interest rates, safe haven demand and sustained central bank purchases.
He gold is trading close to US$2,640 per ounce, after posting a modest gain in the previous session, as investors analyze mixed data from the US. Service provider activity in that country expanded at the fastest pace since October 2021, while a measure of manufacturing activity in New York state fell to the lowest level since last May.
The Federal Reserve will make its final monetary policy decision of the year on Wednesdayfollowed by announcements in Japan and the UK this week. Interest rate swaps are almost fully pricing in a quarter-point cut in the US, and traders will focus on the language of monetary policymakers for clues about the outlook for 2025. Lower interest rates are usually positive for gold, which pays no interest.
The good year of gold
The precious metal has risen more than 28% this year, heading for its biggest annual gain since 2010. Its strength has been driven by monetary easing in the US, safe-haven demand and sustained purchases by central banks. of the world. The value of gold imports into India soared to a record in November after the government reduced customs duties.
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Spot gold fell 0.5% to $2,639.21 an ounce at 10:57 a.m. in London. The Bloomberg Dollar Spot Index rose 0.1%, while silver, palladium and platinum also traded lower.
“Gold is in a sort of ‘Goldilocks’ situation,” Max Layton, global head of commodities research at Citigroup Inc., said in an interview with Bloomberg TV. Layton noted that whether inflation remains above or below expectations, gold would benefit from both a slowdown in the US economy and lower interest rates.
Source: Ambito
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