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Gold posts second straight monthly gain on rate cut bets

Gold

Spot gold slid 0.4 per cent to $2,035.79 per ounce after reaching a near seven-month high in the earlier session

Gold slid on Thursday but posted a second successive monthly gain as expectations that the Federal Reserve may soon cut interest rates enhanced the appeal of non-yielding bullion.

Spot gold slid 0.4 per cent to $2,035.79 per ounce after reaching a near seven-month high in the earlier session. Prices have advanced nearly 2.7 per cent in November.

U.S. gold futures dropped 0.5 per cent to $2,036.90.

Contributing to gold’s marginal drop, the dollar index gained for the day.

But the currency was headed for its worst month in a year, while 10-year Treasury yields reached a two-and-a-half month low.

Gold might be a little tired here but it is had a very nice run. The decline (in prices) should be limited to $2,015-$2,020 and no concerns will be felt unless we fall back below $2000, Tai Wong, a New York-based independent metals trader.

Traders have raised bets for a rate cut from an 80 per cent chance in May to a one-in-two possibility in March, CME’s FedWatch tool shows.

We are expecting gold prices to break into new highs in H1 2024 as we approach the Fed pivot and (with) the economy likely to slow, said Daniel Ghali, commodity strategist at TD Securities.

Traders took stock of data showing U.S. consumer spending increased moderately in October, while the annual rise in inflation was the smallest since early 2021. Jobless claims increased slightly.

Focus will be on comments from Federal Reserve Chair Jerome Powell on Friday.

J.P. Morgan in its 2024 commodities outlook underlined that across commodities the only structural bullish call they held was on gold and silver.

Silver added 0.4 per cent to $25.11 per ounce, bound for its second successive monthly gain.

Platinum was 0.8 per cent lower at $924.58. Palladium slipped 0.1 per cent to $1,025.85.

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