Spot Gold was holding not far from a fresh 1-month high on Friday and was poised for a third weekly gain in a row, as expectations of further interest rate cuts by the Federal Reserve grew following the latest US CPI inflation data.
Fed Governor Christopher Waller said on Thursday that three or four rate cuts were still possible in case US macro data weakened further.
Market players are now wagering two Fed rate cuts, with a good chance for the first one to occur as early as May.
As President-elect Donald Trump is expected to return to the White House for his second term next week, investors will likely remain focused on his policy plans, including tariffs, which are considered by analysts as inflationary.
“Increased uncertainty due to the incoming administration and its potential actions are influencing gold as an instrument to trade short-term volatility,” Michael Langford, chief investment officer at Scorpion Minerals, was quoted as saying by Reuters.
Gold is often regarded as a good inflation hedge.
Spot Gold was last edging down 0.18% to trade at $2,709.95 per troy ounce. Yesterday the yellow metal went up as high as $2,724.78 per troy ounce, or its strongest price level since December 12th 2024.
The commodity was set for a 0.77% weekly gain.
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