Spot gold (Symbol: XAUUSD) rose to $2,696.82 per ounce ahead of the U.S. Consumer Price Index (CPI) data, shaping market expectations for Federal Reserve actions in 2024. Traders are urged to keep an eye on the upcoming Producer Price Index (PPI) data set for release later today.
Gold Hikes with Growing Rate Cut Bets
Current forecasts suggest that the Fed will cut interest rates by 25 basis points on 18 December, with 86% of traders backing this scenario according to the CME FedWatch tool.
What this week's CPI print will mean for monetary policy moving forward, with Dakota Wealth Management's Robert Pavlik: pic.twitter.com/QJwIshmY1H
Further, rising tensions in the Middle East add further support for gold. The Israeli military reported strikes on key strategic targets in Syria, escalating concerns over regional stability.
Technical Analysis: Bullish Bias in Gold
Picture: Gold climbs steadily with rate hike expectations, as seen on the VT Markets app.
The charts indicate the steady movement of gold over the last trading session, closing around 2700.20 and moving upward, displaying a steady climb from its opening near 2660.86.
The price rose towards a high of 2704.42 and found only mild pullbacks along the way, reflecting an ongoing bullish bias on the short-term chart.
Global Economic Stances
Gold is traditionally viewed as a safe haven during periods of economic and geopolitical uncertainty and typically performs well in a low-interest-rate environment. Alongside gold, silver prices also experienced a modest rise, climbing to $31.93 per ounce. Platinum also held steady at $943.15, while palladium rose to $971.44.
Central bank demand, ongoing monetary policy easing, and global political turmoil have propelled gold prices upward by 31%, positioning it for its best annual performance since 2010. Given the strong momentum in gold and expectations for further monetary easing, further gains are anticipated in the near term.
However, key inflation reports could prompt price volatility, and traders will be looking closely for alignment between inflationary trends and Federal Reserve policy forecasts.
