Gold prices climbed for the third straight day as traders assessed the potential impact of upcoming US economic data on the Federal Reserve’s future interest rate decisions. The precious metal traded near $2,670 per ounce, reaching its highest level since mid-December, though price movements were muted due to partial market closures in the US on Thursday.
Recent data revealed a slowdown in private-sector hiring and wage growth in the US for December, which could influence the Fed’s approach to rate cuts. However, concerns over rising inflation remain, prompting the central bank to proceed cautiously in its efforts to ease monetary policy. Lower borrowing costs typically support gold, which does not yield interest.
Market participants are closely awaiting the December payrolls data, set to be released on Friday. Economists predict a moderation in job growth, which is still expected to remain robust through 2025. A survey by 22V Research indicated heightened investor attention on this report compared to previous months.
Gold experienced a remarkable 27% surge in 2024, driven in part by US monetary easing, but the rally lost momentum following former President Donald Trump’s election win, which strengthened the dollar. Looking ahead, analysts anticipate more modest gains in gold prices, with Goldman Sachs revising its target for gold to reach $3,000, now expected by mid-2026, largely due to fewer anticipated Fed rate cuts.
As of 5 p.m. in New York, spot gold had gained 0.2%, closing at $2,667.25 per ounce. The Bloomberg Dollar Spot Index was up by 0.1%. Platinum and palladium held steady, while silver saw a slight increase.
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