Gold remains stable at $2,660 due to safe haven demand and softer America One dollar
During the Asian session, the gold price (XAUUSD) rises sharply on Friday and reaches a four-day high in the $2,662-2,663 range. Fears of a trade war and geopolitical tensions are still driving haven flows toward the precious metal. Furthermore, the recent drop in US Treasury bond yields and wagers that the Fed will reduce borrowing costs once more in December provide more support to the commodity that doesn’t yield.
The USD gives the XAUUSD pair more support after plunging to a new two-week low.
Demand for gold also supported by the US dollar (USD), which has dropped to a new two-week low due to the Fed’s potential to cut interest rates further. However, the Fed may be limited in its ability to ease policy further due to expectations that US President-elect Donald Trump’s policies will increase inflation and indications that the progress in reducing US inflation stalled in October. This should cap the Gold (XAUUSD) and limit the USD losses.
Daily Market Movers: Gold maintains its intraday bullish bias amid worries about a trade war and geopolitical threats.
Gold price (XAUUSD) rises sharply on Friday and reaches a four-day high in the $2,662-2,663 range. In response to Ukraine’s firing of Western missiles at its decision-making centers, Russian President Vladimir Putin stated that Russia may use its new hypersonic missile to attack those centers. Earlier this week, US President-elect Donald Trump promised to impose tariffs on all goods entering the US from China, Canada, and Mexico. This could lead to trade wars.
As traders now perceive a 70% chance that the Federal Reserve will lower interest rates at the next policy meeting in December, the US dollar finds it difficult to build on Thursday’s slight gains.
Committee members disagreed about how much more they might need to lower interest rates, according to minutes of the November FOMC meeting that made public earlier this week.
PCE data revealed that the US’s efforts to reduce inflation reached a standstill in October.
On Wednesday, the PCE data revealed that the US’s efforts to reduce inflation reached a standstill in October. Additionally, investors appear to be certain that Trump’s policies will increase inflation.
This implies that the Fed might take a cautious approach. restricting any additional drop in the yields on US Treasury bonds and increasing uncertainty about the outlook for interest rates in 2025.
In anticipation that Trump’s nominee for Treasury Secretary, Scott Bessent, will seek to rein in US deficits, the benchmark 10-year US Treasury yield fell to a two-week low on Wednesday.
The US stock markets will close early on Friday in observance of Thanksgiving, and no significant economic data that could influence markets scheduled to be released.
