Gold set for weekly gain with focus on Fed's policy decision
Shafaq News/ Gold prices edged higher on Friday and were set for a weekly gain, driven by reports of top consumer China resuming gold purchases, and heightened expectations of an interest rate reduction by the Federal Reserve at its Dec. 17-18 meeting.
Spot gold was up 0.3% at $2,688.12 per ounce, as of 0601 GMT. Bullion is headed for a
weekly gain and has added more than 2% so far this week.
U.S. gold futures were flat at $2,709.00.
Traders' attention is now on the Fed's decision on interest rates, and they see a 96.4% chance of a 25-basis-point (bp) cut, CME's FedWatch Tool showed.
"I think the Fed will deliver the expected 25-bp cut, and the dot plot will shift to a less-dovish stance. While this could initially weigh on gold next week, it shouldn't come as a huge surprise," Matt Simpson, a senior analyst at City Index said.
"Gold enjoyed a bullish run heading into this week's U.S. inflation report, but another sharp bearish reversal on Thursday should remind gold traders that complacency is the devil."
Gold prices fell more than 1% on Thursday on profit-taking after the bullion briefly hit a five-week high earlier in the session.
U.S. producer prices rose more than expected in November amid a surge in the cost of food. Data on Wednesday showed that consumer prices increased by the most in seven months in November cementing bets of an interest rate cut.
The European Central Bank cut interest rates for the fourth time this year and the Swiss National Bank cut its interest rate by 50 basis points, its biggest reduction in almost 10 years on Thursday.
Bullion generally thrives in a low-interest-rate environment.
Spot silver nudged 0.1% up to $30.99 per ounce.
Platinum added 0.1% to $930.99, while palladium fell 0.1% to $968.99. Both metals were set for weekly gains.
(REUTERS)
