Gold Settles at $2,661.50: Fed Rate Cut Odds Rise to 66%

On November 28, 2024, gold prices experienced a minor setback as the U.S. dollar gained strength. Spot gold decreased by 0.3% to $2,627.60 per ounce, while U.S. gold futures slipped 0.5% to $2,627.00.

The dollar index rose 0.1%, making gold less attractive to foreign currency holders. Despite this dip, gold closed at $2,661.50 per ounce. Market analysts offered insights into the current landscape.

Kelvin Wong from OANDA suggested that slowing inflation could lead to a less dovish Federal Reserve policy, potentially limiting pressure on gold. Renisha Chainani of Augmont predicted short-term price fluctuations between $2,600 and $2,700 per ounce.

Several factors are influencing gold’s performance. Recent economic data, particularly the Core Personal Consumption Expenditures (PCE) figures, showed stalled inflation progress.

This has led to increased market expectations for a December rate cut, now at 66% probability, up from 55.7% previously. Ongoing geopolitical tensions continue to support gold‘s status as a safe-haven asset.

Technically, gold faces resistance near $2,666, with further barriers at $2,700 and $2,721. Support lies at $2,600, with a potential decline towards the 100-day moving average at $2,572 if breached.

SPDR Gold Trust, the world’s largest gold-backed ETF, reported a 0.10% decline in holdings to 878.55 metric tons. Despite short-term fluctuations, the long-term outlook for gold remains cautiously positive.

Continued geopolitical uncertainty, inflation concerns, and potential changes in Federal Reserve policy are expected to support gold prices in the coming months.

Investors should remain vigilant, as holiday-thinned trading conditions could lead to amplified volatility. Any significant global trade developments or economic news could impact market sentiment and price movements in the near future.

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