Gold futures prices continued to surge, approaching $2,060 today. The positive factor was the weakening of the dollar. and the fall in US government bond yields.
At 10:44 pm Thai time, gold contracts on the COMEX (Commodity Exchange) market will be introduced in February. it added $17.10 or 0.84% to $2,057.60/oz.
A weaker dollar increases the attractiveness of gold. This makes gold contracts cheaper for holders of other currencies. Regarding the fall in US government bond yields It will help reduce the opportunity cost of holding gold. This is because gold is an asset that has no interest income.
In addition, gold prices are also supported by expectations of an interest rate cut by the Federal Reserve (Fed) next year.
The CME Group’s FedWatch Tool indicates that investors expect the Fed to begin cutting interest rates at its meeting in March 2024. And the Fed will cut interest rates 6 times in 2024, cutting interest rates by 0.25% each time, for a total of 1.50%, more than the Fed has indicated to cut interest rates 3 times, 0.25% each time, for a total of 0.75%.
Investors will be keeping an eye on the Personal Consumption Expenditure (PCE) price index due for release on Friday The PCE index is the Fed’s preferred measure of inflation. Because it can detect changes in consumer behavior and covers the prices of goods and services more widely than the Consumer Price Index (CPI).
Analysts expect the Headline PCE index, which includes food and energy categories, to rise 2.8% year-on-year in November from 3.0% in October.
On a monthly basis, the general PCE index is expected to be unchanged in November. or increased by 0.0% from the level of 0.0% also in October.
In terms of the Core SNP Index (Core SNP), which does not include food and energy categories. It is expected to increase by 3.4% in November year on year from 3.5% in October.
On a monthly basis, the core PCE index is expected to increase by 0.2% in November after also increasing by 0.2% in October.
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