94Ha Viewpoint
The increase in the US Consumer Price Index (CPI) in November reached market expectations, boosting expectations of another rate cut by the US Federal Reserve (FED). After four consecutive days of soaring, gold prices broke through $2,720 per ounce on Wednesday (December 11), reaching a peak in nearly two weeks.
After the US authorities released the CPI data, the market bet that the Federal Reserve will cut interest rates by another 25 basis points before the end of 2024. Swap traders have almost completely digested this sentiment, and the market’s expectation that borrowing costs may fall further has also pushed up gold prices.
The Fed’s shift to an easing cycle, market risk aversion demand, and continued purchases by central banks have caused gold prices to rise by nearly one-third since the beginning of the year. In addition to setting many historical records, it is expected to record the strongest performance since 1979. Although Trump’s re-election as US President once put pressure on gold prices, the People’s Bank of China previously announced that it would resume gold purchases that had been stagnant for half a year, injecting a wave of impetus into gold prices.
As of 11 a.m. Thursday (12th), spot gold was trading at $2,704.75 per ounce, slightly giving up gains. However, Wednesday’s gain was 0.9%, and the previous high was set in October, when the price of gold soared to more than $2,790 per ounce.
