Prior to US inflation data release, gold stabilizes in a narrow range

30 Nov 2023 , 10:39 AM

Thursday saw gold prices stabilize in a narrow range and stay near a nearly seven-month high as investors watched important inflation data to determine whether interest rate reduction in the US will occur sooner than anticipated.

After reaching its highest level since May 5 on Wednesday, spot gold was steady at $2,043.69 per ounce and was expected to rise for a second straight month.

The price of December delivery U.S. gold futures dropped 0.2% to $2,044.20 per ounce.

The dollar index was headed for its worst monthly performance in a year in November as it hovered around three-month lows.

Gold becomes more affordable for holders of foreign currencies as the dollar declines.

The yield on 10-year Treasury notes fell to 4.2210%, a two-and-a-half-month low. 

This week, representatives of the Federal Reserve raised the prospect of a rate reduction and a reduction in inflationary pressures in the months to come.

 According to CME’s FedWatch Tool, traders have increased their bets on a rate decrease by the US Federal Reserve from an 80% possibility in May to a one-in-two chance in March.

The opportunity cost of owning non-interest bearing bullion is decreased by lower interest rates.

Investor attention will be focused on the inflation data for personal consumption expenditures in the United States, which is scheduled for release at 1330 GMT, as well as the remarks made by Fed Chair Jerome Powell on Friday.

Once again, Palestinian detainees were exchanged for hostages, and humanitarian aid reached the beleaguered Gaza Strip, international pressure mounted on Israel and Hamas to declare a ceasefire.

An official factory survey revealed that China’s manufacturing activity shrank in November for a second consecutive month and at a faster rate than in October, indicating the need for additional policy support measures to bolster economic growth.

An ounce of spot silver now costs $24.99, down 0.1%. Moreover, platinum fell 0.1% to $931.28. Palladium’s price per ounce dropped by 0.2% to $1,025.58.

For feedback and suggestions, write to us at [e-mail]