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Gold prices rose on the back of the upcoming U.S. inflation data, which is expected to guide the Federal Reserve’s rate policy.
Spot gold climbed to $2,631.60 per ounce in early trading, touching a session high of $2,647.99. Futures prices held firm at $2,658.10. The anticipation of lower interest rates this month is bolstering gold’s appeal as a non-yielding asset.
Picture: Gold shows bullish momentum testing key resistance at 2,646, with MACD supporting potential further gains, as seen on the VT Markets app.
The XAU/USD chart shows a bullish bias with a significant upward spike and a MACD crossover confirming upward momentum.
The price is testing the critical 2,646 resistance, and any breakout above this level could lead to further gains. Moving averages suggest short-term bullishness, but a failure to breach 2646 could result in a pullback to 2,613 support.
The CME Group’s FedWatch Tool revealed that markets currently assign an 85.1% chance of a 25-basis-point rate cut in December. This sentiment gained traction after last week’s labour market data indicated resilience but signs of cooling.
U.S. employers added 227,000 jobs in November, recovering from October’s hurricane-induced slowdown. However, the unemployment rate inched higher to 4.2%, hinting at some underlying economic slack.
The expected rate cut decreases the opportunity cost of holding gold, potentially driving further interest in the precious metal.
With the inflation report due on Wednesday, market participants are looking for clues about the Fed’s next move, which could provide a clearer trajectory for gold prices.
Developments in global conflict also added complexity to market dynamics. Syrian rebels’ takeover of Damascus marked a turning point in the country’s 13-year civil war, pushing President Bashar al-Assad to flee to Russia.
Political upheaval in the region often enhances gold’s safe-haven status, and traders are closely watching for any spillover effects that could elevate demand for the asset.
In the broader market, silver held steady at $30.99 per ounce, platinum traded unchanged at $930.20, while palladium gained 0.6% to reach $962.10.
Gold may test resistance levels near $2,650 if inflation data aligns with expectations of easing monetary policy. On the downside, support around $2,600 could remain firm in the short term.
Palladium’s continued rise indicates positive sentiment for industrial metals, potentially buoyed by easing recession fears.
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