Gold is rising, reaching a high of almost two weeks on Friday for the fifth day in a row.
Friday saw the gold price (XAUUSD) extend its upward trend for the fifth day in a row. It reached a peak of almost two weeks, hovering around $2,690-2,691 during the Asian session. A major factor supporting the precious metal is the escalating tensions between Russia and Ukraine, which compel investors to seek solace in conventional safe-haven assets. The commodity, which regarded as an inflation hedge, receives further assistance from concerns that the policies of US President-elect Donald Trump may cause inflationary pressures to increase again.
Bullish USD, high US bond yields, and bets on a less dovish Fed don’t really stop the upward trend.
Meanwhile, an extension of the post-US election US Dollar (USD) rally to its highest level since October 2023 appears to have little effect on the bulls of XAUUSD. Though they don’t do much to stop the gold price’s continuous upward trend, fears that sustained higher inflation may restrict the Fed’s ability to loosen monetary policy continue to support high US Treasury bond yields. The commodity is still on track to record significant weekly gains and end a three-week losing streak, which in turn supports prospects for a further near-term appreciating move.
Daily Market Update:Gold pruce scale higher on Friday due to swing tensions between Russia and Ukraine are still the main Despite a bullish US dollar.
With bets for a less dovish Federal Reserve, the USD Index, which measures the Greenback against a basket of currencies, surged to its highest level since October 2023.
Investors still worried that the policies of US President-elect Donald Trump might rekindle inflation and compel the Fed to slow its rate-cutting trajectory.
Fed Chair Jerome Powell was among several prominent FOMC members who recently issued warnings about inflationary shocks and cautioned against further policy easing.
Traders are pricing in about a 55% chance that the Fed will reduce borrowing costs by 25 basis points in December.
Traders are pricing in about a 55% chance that the Fed will reduce borrowing costs by 25 basis points in December, according to the CME Group’s FedWatch Tool.
In the meantime, , According to Chicago Fed President Austan Goolsbee, inflation is headed toward 2%, and it might be wise to reduce interest rate cuts more gradually.
John Williams, the president of the New York Fed, added that the labor market is balanced and not driving inflation higher.
On the economic data front, US Weekly initial jobless claims dropped by 6K last week, to 213K, or a seven-month low against expectations for a reading of 220 K.
US Existing Home Sales rebounded sharply after September’s slump to the lowest since October 2010 and posted the first annual gain since mid-2021 in October.
The Philly Fed Manufacturing Index indicated that manufacturing activity in the Philadelphia region unexpectedly contracted in November and fell to -5.5 from +10.3.
Friday’s release of flash PMIs looked for a fresh insight into the health of the global economy, which, in turn, should provide a fresh impetus to the Gold (XAUUSD).
