Gold prices experienced an uptick in early Asian trading on Wednesday, fueled by strong expectations that the Federal Reserve will cut interest rates in December. Spot gold rose 0.2% to $4136.59 per ounce, while US December gold futures edged down 0.1% to $4134.
Data from CME Group indicates that markets are pricing in an 84% probability of a rate cut next month, a significant increase from 50% just last week. This anticipation has bolstered the appeal of the precious metal, particularly in the context of a potentially lower interest rate environment and ongoing geopolitical uncertainties.
Market sentiment was also influenced by statements from Ukrainian President Volodymyr Zelensky, signaling a willingness to pursue a US-backed peace framework. Investors are also awaiting the release of US jobless claims data later today, which could further impact market movements.
Meanwhile, other precious metals saw declines. Silver fell 0.1% to $51.36 per ounce, platinum dropped 1% to $1538, and palladium decreased by 1.1% to $1382.24.
The anticipated Federal Reserve decision continues to be a key driver in the gold market, with traders closely monitoring economic indicators and geopolitical developments for further clues. The potential for lower interest rates typically makes gold a more attractive investment as it reduces the opportunity cost of holding the non-yielding asset.
DZWatch will continue to provide updates on market trends and analysis as they unfold.
