Gold prices firm on Fed rate-cut prospects

Gold prices climbed for a third straight session on Tuesday, helped by a weaker US dollar and lower Treasury yields on expectations that the Federal Reserve will lower interest rates next year, reports Reuters.
Spot gold gained 0.5 per cent to $2,062.71 an ounce by 1224 GMT, having hit a more than two-week high of $2,070.39 in the previous session. US gold futures rose 0.2 per cent to $2,073.90.
Trading was thin on the day after Christmas, with several markets closed for public holidays and trading expected to remain muted across the shortened week.
"The main factor supporting gold is still the expectation of dovish central banks and falling rates in the next few years," said Kinesis Money analyst Carlo Alberto De Casa.
There is a good chance gold could stay above $2,000 in 2024, De Casa added, pointing to continuing geopolitical tensions.
Lower US interest rates increase the appeal of non-yielding bullion, which is also widely considered a safe-haven investment in times of economic and geopolitical turmoil.
Data released on Friday showed US prices fell in November for the first in more than three and a half years, further slowing inflation and boosting expectations of a Fed interest rate cut next March.
Traders are now pricing in an 89 per cent chance of a rate cut by the US central bank in March, according to the CME FedWatch tool.
The dollar index hovered near a five-month low while the benchmark US 10-year bond yield edged lower.
A weaker US currency makes dollar-priced gold more attractive for those holding other currencies.