Gold prices saw a significant increase, supported by a decline in the value of the dollar, as expectations rose for an interest rate cut by the Federal Reserve in December. Additionally, increasing geopolitical tensions contributed to boosting demand for the precious metal as a safe haven.
Although gold faced pressure earlier in the week following the announcement of a ceasefire in the Middle East, escalating tensions between Russia and Ukraine helped reduce losses in the final two sessions of the week.
Spot gold reached $2,659.14 per ounce, a 0.6% increase, while gold futures rose by 0.7%, reaching $2,683.79 per ounce. Geopolitical tensions between Moscow and Kyiv continued to dominate the market.
The dollar saw a noticeable decline this week amid expectations that the Federal Reserve will reduce interest rates by 25 basis points in December. Data showed that analysts are predicting this scenario with a probability of over 68%, according to market indicators.
Despite U.S. inflation remaining at elevated levels, statements from Federal Reserve officials indicating a gradual easing of monetary policies helped strengthen these expectations. However, the long-term outlook remains uncertain, especially with inflation still above the Fed’s 2% target and expansionary policies that could further increase inflationary pressures.
On another note, platinum futures rose by 2.5%, reaching $954.80 per ounce, while silver futures climbed 1.8% to $31.102 per ounce.
In the industrial metals sector, copper saw a slight increase, with benchmark copper futures on the London Metal Exchange closing at $9,020.50 per ton, up by 0.3%. Markets are awaiting the release of China’s Purchasing Managers’ Index on Saturday, which is expected to reflect the impact of the stimulus measures introduced by Beijing in recent months.
