Gold prices rose significantly, gaining 1.18% to reach $2,691.54 per ounce as of [12:40 pm PST]. This increase, equivalent to $31.47, marks the highest level since November 25. Meanwhile, gold futures slightly decreased by 0.27%, settling at $2,674.80 per ounce.
Gold Prices Near Two-Week High
On Wednesday, gold prices hovered near their highest point in two weeks. This surge was driven by growing geopolitical tensions and speculation about another rate cut by the Federal Reserve next week. Market participants eagerly anticipate the U.S. inflation data, which could influence Federal Reserve decisions for 2025.
Focus on U.S. Consumer Price Index
The U.S. Consumer Price Index (CPI) is expected to show a 0.3% rise in November. Analysts believe this data will shape future monetary policy. According to Reuters, an expected CPI result could prompt the Federal Reserve to reduce interest rates next week. Financial analyst Kyle Rodda from Capital.com commented, “A favorable CPI result might encourage the Fed to cut rates and support further gold price growth.”
Federal Reserve’s Rate Cut Expectations
Market predictions suggest a 25-basis-point rate cut by the Federal Reserve on December 18. Around 90% of economists expect this move, with the possibility of a pause in January. Concerns over inflation risks play a significant role in these predictions.
Why Gold Prices Are Rising
Gold thrives during economic uncertainty and geopolitical turmoil. In low-interest-rate environments, it’s viewed as a safe investment. This year, factors such as central bank buying, geopolitical tensions, and monetary policy easing have pushed gold to record highs, marking a 30% increase year-to-date.
Bullish Predictions for Gold
Goldman Sachs remains optimistic about gold’s performance, even dismissing doubts about bullion reaching $3,000 per ounce by 2025. Analysts argue that even with a strong dollar, gold can continue its upward trajectory.
Other Precious Metals Performance
While gold experienced gains, other precious metals saw mixed results. Spot silver dropped by 0.5%, settling at $31.75 per ounce. Platinum fell 1% to $932.75 per ounce, while palladium rose slightly by 0.2% to $969.50 per ounce.
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