Gold climbs to 3-week high as US rate cut bets firm

News

Gold prices climbed to a three-week high on Thursday as the U.S. dollar and bond yields touched multi-month lows on mounting bets that the U.S. central bank will start to cut interest rates as early as March next year.

FUNDAMENTALS

* Spot gold was up 0.5% at $2,086.66 per ounce, as of 0211 GMT, hitting its highest since Dec. 4, when prices raced to a record high of $2,135.40.

* U.S. gold futures rose 0.2% to $2,097.10 per ounce.

* Bullion looked set to log its best year in three with a 14% gain, as the war in Ukraine and tensions in the Middle East boosted safe-haven inflows and bets of U.S. rate cuts lifted the metal’s appeal.

* Bets for interest rate cuts from the U.S. Federal Reserve have firmed following cooler inflation data, with traders now pricing in an 88% chance of monetary policy easing in March, according to the CME FedWatch tool.
* Lower interest rates decrease the opportunity cost of holding non-yielding bullion. * The dollar index slipped to a five-month low and was set for its worst yearly performance since 2020, while benchmark U.S. 10-year bond yields languished near their lowest level since July.

* Meanwhile, London’s gold price benchmark hit an all-time high of $2,069.40 per troy ounce at an afternoon auction on Wednesday, the London Bullion Market Association (LBMA) said.

* Spot silver rose 0.8% to $24.44 per ounce and was poised to end the year with a near 2% annual gain.

* Platinum rose 0.2% to hit a more than six-month high of $999.00. Palladium climbed 0.9% to $1,163.91, but was on track for its biggest yearly decline since 2008.

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