Gold prices rose in the European market on Friday, resuming the gains that temporarily paused yesterday due to correction and profit-taking, and moving once again toward a three-week high. The metal is also on track to record a weekly gain, supported by the weaker performance of the US dollar in the foreign-exchange market.
These gains are being limited by more hawkish comments from several Federal Reserve officials, which have reduced expectations of a US rate cut in December. Investors are also awaiting the resumption of official economic data releases after the reopening of the federal government.
Price Overview
• Gold prices today: Spot gold rose by 0.95% to 4,211.52 dollars per ounce, from the opening level of 4,171.72 dollars, after touching an intraday low of 4,159.09 dollars.
• At Thursday’s settlement, gold lost 0.55% in its first decline in five sessions, due to correction and profit-taking, after earlier touching a three-week high of 4,245.13 dollars per ounce.
Weekly Trading
So far this week—ending officially at today’s settlement—gold prices are up by more than 5%, and are on the verge of recording their first weekly gain in a month.
US Dollar
The US Dollar Index fell on Friday by 0.1%, extending losses for a second session, and nearing a two-week low, reflecting the continued decline of the US currency against a basket of major currencies.
As we know, a weaker dollar makes dollar-priced bullion more attractive for holders of other currencies.
Despite the reopening of the US government after the longest shutdown in the nation’s history, markets remain concerned about the longer-term impact of the shutdown on US economic activity.
US Interest Rates
• Mary Daly, President of the San Francisco Federal Reserve, said on Thursday that the risks facing the Fed’s objectives of price stability and full employment are now “balanced.”
• Beth Hammack, President of the Cleveland Federal Reserve, stated that interest-rate policy should remain restrictive in order to pressure inflation, which remains elevated.
• Alberto Musalem, President of the St. Louis Federal Reserve, noted that monetary policy is now closer to neutral than moderately restrictive, leaving limited room for further easing without becoming overly accommodative.
• According to the CME FedWatch tool: Market pricing for a 25-basis-point cut in December fell from 67% to 51%, while expectations of holding rates steady rose from 33% to 49%.
Investors continue monitoring Fed commentary closely, with expectations that official US data releases will resume soon.
Gold Outlook
Brian Lan, managing director at Gold Silver Central in Singapore, said gold performed strongly this week mainly due to the weaker dollar and speculative inflows anticipating Fed rate cuts.
He added that with the US government reopening—and amid concerns about slowing growth and persistent inflation—expectations have shifted slightly toward the Fed not cutting rates aggressively, which is putting some negative pressure on gold.
SPDR Fund
Holdings of the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose by 2.29 metric tons on Wednesday, marking a third consecutive increase, bringing total holdings to 1,048.93 metric tons—the highest level since October 22.
