Gold prices climbed to a two-week high on Tuesday, helped by rising tensions in the Middle East and expectations of a U.S. rate cut this month, with key US inflation data later this week in focus, reports Reuters.
Spot gold climbed 0.7 per cent to $2,678.21 per ounce, as of 1226 GMT. US gold futures rose 0.6 per cent to $2,700.80.
Friday's US jobs report has boosted bets around a December Fed rate cut, while geopolitical tensions in the Middle East and reports of China's central bank resuming gold purchases after a six-month break are supporting gold prices, said FXTM senior research analyst Lukman Otunuga.
Traders now see about an 86 per cent probability of a 25-basis-point U.S. rate cut next week, according to the CME FedWatch tool, up significantly from 73 per cent last week.
Investors are eyeing the US Consumer Price Index (CPI) release on Wednesday and the Producer Price Index (PPI) on Thursday, both expected to have an influence on the Fed's decision.
"Gold bulls could face obstacles if a hotter-than-expected U.S. CPI report reduces bets around Fed cuts beyond December 2024," Otunuga added.
Non-yielding bullion tends to shine in a lower-interest-rate environment and during periods of economic or geopolitical instability.
Syrian sources reported on Tuesday that Israeli forces had advanced to 25 km southwest of Damascus, beyond a buffer zone in southern Syria, and conducting overnight airstrikes on Syrian military targets. Israel denied going beyond the buffer zone.
Gold hits 2-week peak on Fed rate cut optimism
FE Team | Published: December 11, 2024 00:00:57
Gold hits 2-week peak on Fed rate cut optimism
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