Nov 28, 2024

GOLD+0.46%XAGUSD1!−0.85%PL1!+0.73%XPDUSD1!+0.69%

Key points:

• Renewed investor interest has supported gold- analyst
• Mexico warns Trump tariffs would kill U.S. jobs
• Markets see a 68.2% chance of a December rate cut

Gold prices rose on Thursday after slowing U.S. inflation data released in the last session firmed bets on a Federal Reserve rate cut next month.

Spot gold GOLD was up 0.4% to $2,645.67 per ounce, as of 1024 GMT. U.S. gold futures GOLD rose 0.2% to $2,644.80, with low trading volumes expected as U.S. markets are closed for Thanksgiving.

“The precious metal is up roughly 0.3% after inflation data in the previous session supported the argument for lower U.S. rates,” said FXTM senior research analyst Lukman Otunuga.

While the Fed is widely expected to deliver a third rate reduction in December, minutes of the Nov. 6-7 meeting published on Tuesday showed officials appeared divided over how much farther they may need to cut rates.

Markets now see a 68.2% chance of a quarter-point rate cut in December versus a 59.4% chance on Wednesday, as per the CME group’s FedWatch tool.

Gold tends to do well in a lower interest rate environment. Prices posted their deepest one-day decline in more than five months on Monday, and hit its lowest since Nov. 18.

“After that sell-off in the wake of the election in the States, there has been some revived investor interest that has given some support, while weaker-handed holders were flushed out,” said StoneX analyst Rhona O’Connell.

“The medium-term caution over the evolution of American financial and international policies is likely to mean that a good part of the market is sitting on its hands.”

Meanwhile, Mexican President Claudia Sheinbaum warned of retaliation if Trump enforces a 25% tariff, citing potential U.S. job losses and higher consumer prices.

“The market now is a bit more careful and prices probably will be range-bound with more downward bias going into the year-end,” said Brian Lan, managing director at Singapore-based dealer GoldSilver Central.

Spot silver XAGUSD1! fell 0.2% to $30.01 per ounce, platinum PL1! rose 0.6% to $933.04 and palladium XPDUSD1! gained 1.2% to $983.30.