Gold gains as Fed rate cut bets grow ahead of inflation data
Gold prices rose on Friday as expectations grew that the Federal Reserve would cut interest rates next week. Investors were also awaiting U.S. inflation data, which could provide further insight into the central bank's next steps.
Spot gold rose 0.7% to $4,235.59 per ounce, as of 1416 GMT, and was on track for a 0.1% weekly gain, News.Az reports citing Reuters.
U.S. gold futures for February delivery edged 0.6% higher to $4,266.50 per ounce.
"The odds are there for a rate cut... gold is retesting and reaffirming the $4,200/oz level. Although it has been volatile, the trajectory and momentum has been positive this week," said Alex Ebkarian, COO at Allegiance Gold.
Lower interest rates generally support gold, which is a non-yielding asset.
CME's FedWatch tool now shows an 87.2% chance that the U.S. central bank will cut rates next week.
Traders are waiting for September's Personal Consumption Expenditures (PCE) data later today after it was delayed due to the government shutdown. The release is expected to show a 0.2% monthly rise and 2.9% annual growth.
This follows Wednesday's labor market data, which showed private payrolls fell in November by the sharpest margin in over 2-1/2 years.
Several Fed policymakers have adopted a dovish tone recently.
Morgan Stanley projected a 25-basis-point rate cut by the Fed at its December 9-10 meeting, in line with estimates from J.P. Morgan, Bank of America, and a majority of Reuters-polled economists.
Similar news
