Gold Prices Rise As Fed Rate Cut Expectations Boost Appeal.

(CTN News) – Gold reached a more than two-week high on Friday, experiencing a second consecutive week of gains as the dollar weakened and US Treasury yields declined.

This was driven by increasing expectations that the Federal Reserve will cut interest rates early next year. At 3:50 p.m. ET (20:50 GMT), spot gold was up 0.4% at $2,052.69 per ounce, its highest level since December 4, indicating a 1.7% weekly gain. Meanwhile, US gold futures settled 0.9% higher at $2,069.1.

The rise in precious metals, including gold, can be attributed to aggressive rate cut expectations, with the market anticipating a Fed cut in March and a total of 150 bps by 2024.

However, some analysts caution that the market may be overly optimistic. Traders are increasingly betting on rate cuts in March following data showing a continued cooling of price pressures in the US.

With annual US inflation slowing further below 3% in November and underlying price pressures continuing to ease, the dollar index hit a near five-month low, making gold more attractive to foreign buyers.

Additionally, benchmark 10-year bond yields were close to their lowest levels since July. Phillip Streible, chief market strategist at Blue Line Futures in Chicago, believes that gold will continue to benefit from weaker Treasury yields, a weaker US dollar index, and concerns about an economic slowdown.

He suggests that the current technical breakout could potentially push prices up to the $2,100 level and retest recent contract highs.

On the other hand, gold demand in India has declined significantly due to high domestic prices. Silver fell 1.2% to $24.12 per ounce, while palladium was down 0.9% at $1,202.46 after reaching its highest level since October 2 earlier.

Platinum, on the other hand, experienced a 0.7% increase, reaching $969.67, which marks its highest point since September 1. All three metals are poised to achieve their second consecutive week of positive growth.

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