Ahead of a widely anticipated U.S. inflation report on Wednesday, rising global tensions and prospects of another rate drop by the Fed next week helped gold prices push higher to reach a two-week high.
Spot gold was up 0.1% at $2,696.82 an ounce. At $2,726.00, U.S. gold futures increased by 0.3%.
The U.S. Producer Price Index (PPI) on Thursday and the Consumer Price Index (CPI) later in the day are of interest to investors as they may assist set expectations for monetary policy in the upcoming year.
Based on two U.S. rate cuts this year, traders estimate that there is an 86% chance that the Fed will lower rates by another 25 basis points during its meeting on December 17–18, according to the CME FedWatch tool.
According to 90% of economists surveyed by Reuters, the U.S. Fed is likely to lower interest rates by 25 basis points on December 18. The majority of them anticipate a halt in late January due to inflationary worries.
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