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Today, Thursday, the global gold price was able to record its highest level in more than a month during today’s trading before witnessing some decline due to profit-taking sales, after it found support from the US inflation data released yesterday, which increased expectations that the Federal Reserve would… His way to lower interest rates.
The global price of an ounce of gold opened trading today, Thursday, at the level of $2,717 per ounce, recording the highest level in more than a month at $2,726 per ounce, and had recorded the lowest level at $2,700 per ounce, according to Gold Billion analysis.
Gold rose for four consecutive sessions to be able to stabilize above the level of $2,700 per ounce, and is currently facing the resistance area around the level of $2,720 per ounce.
Yesterday, consumer price index data for the United States of America for the month of November, which is the main inflation indicator in the country, was released to show an increase to the highest level in 7 months, but it was in line with expectations, helping this to increase the price of gold by 0.9% during yesterday’s trading.
The inflation data caused increased expectations that the Federal Reserve will make a new cut in interest rates during its meeting next week, with markets placing a 98% probability of a 25 basis point cut.
Gold’s gains were stalled by improved risk appetite, as Wall Street indices also rose on the back of the possibility of a cut in interest rates in the near term. The resilience of the dollar also limited gold’s rise as traders favored the dollar amid growing doubts about the long-term outlook for inflation and interest rates, due to the fact that inflation… At its strongest level in seven months, a trend that is expected to make the Fed cautious about further monetary easing over the coming year.
The focus is on producer price index data due later today, which comes just days before the Fed’s final meeting of the year.
The Fed’s interest rate forecasts will be closely watched, amid growing bets that it will adopt a slower pace of easing in 2025.
In general, we witnessed a good rise in gold due to various factors this week, including geopolitical tensions, China’s resumption of gold purchases, and yesterday’s inflation data, which was in line with expectations, so that the current scenario remains supportive for gold prices until the Federal Reserve meeting, and the slight decline that we saw today. It’s just making profits.
At the same time, the Canadian Central Bank yesterday cut interest rates by 50 basis points, which the Swiss Central Bank also did today. The European Central Bank is expected to cut interest rates by at least 25 basis points.
Interest cuts by global central banks are positive for global gold prices, which benefit from the decline in opportunity costs with lower interest rates as it does not provide a return to its holders.
The World Gold Council showed a market consensus that macroeconomic variables such as GDP, revenues, and inflation will lead to moderate growth for gold in 2025. This growth may be driven by increased demand from central banks or a rapid deterioration in financial conditions, leading to a shift of capital towards… Safe assets such as gold.
However, the World Gold Council believes that changing monetary policies and rising interest rates may pose challenges, while China plays a pivotal role in the gold market, despite the reservation shown by consumers while investors support the market.