GOLD prices nudged higher to touch a two-week peak on Wednesday (Dec 11), supported by escalating geopolitical tensions and expectations of another rate cut by the Federal Reserve next week, ahead of a closely watched US inflation report.
Spot gold was up 0.1 per cent at US$2,696.82 per ounce, as at 0023 GMT. US gold futures rose 0.3 per cent to US$2,726.00.
Investors are eyeing the US Consumer Price Index (CPI) due later in the day, which could help set expectations for monetary policy in the coming year, and the Producer Price Index (PPI) on Thursday.
With two US rate reduction so far this year, traders predict an 86 per cent chance of a further 25-basis-point cut at the Fed’s Dec 17 to 18 meeting, according to the CME FedWatch tool.
The US Fed is likely to cut interest rates by 25 basis points on Dec 18, according to 90 per cent of economists polled by Reuters, with most expecting a pause in late-January amid concerns over inflationary risks.
On the geopolitical front, the Israeli military said it struck most of the strategic weapons stockpiles in Syria and hit two Syrian navy facilities.
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Gold is considered a safe investment during economic and geopolitical turmoil and tends to thrive in a low-interest-rate environment.
Central bank buying, monetary policy easing, and geopolitical tensions have propelled gold to multiple record highs this year, putting the metal on track for its best performance since 2010, with a nearly 31 per cent increase so far.
Goldman Sachs on Tuesday reiterated its bullish stance on gold prices and pushed back on the argument that bullion cannot rally to US$3,000 per ounce by end-2025 in a world where the US dollar stays stronger.
Spot silver added 0.1 per cent to US$31.93 per ounce, platinum steadied at US$943.15 and palladium rose 0.4 per cent to US$971.44. REUTERS
