- December 10, 2024
- By: Admin1_blog
- Precious Metal Market
Gold prices extended gains on Tuesday, buoyed by top consumer China’s pledge to ramp up policy stimulus to help spur economic growth, with investors awaiting U.S. inflation data for further insights into the Federal Reserve’s interest rate outlook.
Spot gold had gained 0.4% to $2,669.84 per ounce, as of 0248 GMT. U.S. gold futures rose 0.3% at $2,692.50.
Gold hit a two-week high on Monday, supported by China’s central bank resuming purchases after a six-month hiatus.
The country will also adopt “appropriately loose monetary policy” next year, alongside a more proactive fiscal policy to spur economic growth, the Politburo was quoted as saying.
This is “a shift from a ‘prudent’ stance that has been held for nearly 14 years. Hence, a further reduction of interest rates in China may spur higher demand for gold purchases,” said Kelvin Wong, OANDA’s senior market analyst for Asia Pacific.
“Secondly, the safe haven demand narrative has resurfaced as China has started a probe into the U.S. AI juggernaut Nvidia over an alleged violation of anti-monopoly law, suggesting more tit-for-tat measures may arise between the U.S. and China.”
Traders are now focused on U.S. inflation data for November after last week’s stronger-than-expected payrolls report boosted the chances of a Fed rate cut next week.
The odds of a quarter-point rate cut on Dec. 18 are currently at 85.8%, according to the CME Fedwatch tool.
The European Central Bank is also expected to cut rates by a quarter point at its policy meeting on Thursday.
Gold, which pays no interest, tends to benefit from lower interest rates as this reduces the opportunity cost of holding bullion.
Elsewhere, the United States and Britain have announced a new wave of sanctions targeting illicit gold trade.
Spot silver added 0.6% to $31.98 per ounce, platinum steadied at $940.15 and palladium was up 0.3% to $976.25.
Source : cnbc
