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Gold rises on renewed Fed rate cut bets


Spot gold was 0.2% higher at $2,053.69 per ounce after marking its biggest daily gain since December 12 on Friday

Gold prices inched up on Monday, holding above the $2,050 mark on safe-haven appeal from elevated tensions in the Middle East and on revised bets for an early rate cut by the U.S. Federal Reserve.

Spot gold was 0.2% higher at $2,053.69 per ounce, as of 0435 GMT, after marking its biggest daily gain since December 12 on Friday.

U.S. gold futures added 0.3% to $2,057.70.

The war in the Middle East reached its 100th day keeping risks of escalations in the region elevated.

Gold is just trading as a proxy for front end yields, which itself is a proxy for renewed expectations of rate cuts in the U.S., with the market now looking past the higher-than-expected CPI figures, said Kyle Rodda, a financial market analyst at

Data on Friday showed U.S. producer prices unexpectedly dropped in December, sending 10-year Treasury yields slipping in response.

Overall, traders are betting on 166 bps of Fed rate cuts this year, higher than Friday morning’s bets of 150 basis points.

Traders are pricing in a 79% probability that they could begin as soon as March, as per LSEG’s interest rate probability app, IRPR.

In the run up to the Fed’s January 30-31 meeting, things look reasonably constructive for gold, provided an absence of anything that proves that the U.S. economy is doing better than everyone’s expecting, added Rodda.

As per Reuters technical analyst Wang Tao, spot gold may break resistance at $2,060 per ounce and move into the $2,071-$2,079 range.

Spot silver gained 0.4% to $23.25 per ounce, platinum jumped 0.8% to $913.07, and palladium advanced 1.6% to $990.48.

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