During the early Asian session on Thursday, the price of gold (XAU/USD) gained significant traction, surpassing the previous record close of $2,070. The yellow metal’s upward momentum was notably supported by the broad-based softening of the US Dollar (USD). Currently, gold is trading near $2,080, reflecting a 0.09% increase for the day.
The US Dollar Index (DXY), a gauge measuring the USD against a weighted basket of currencies utilized by US trade partners, dropped to its lowest level since July, reaching approximately 100.85. Simultaneously, Treasury yields edged lower, with the 10-year yield standing at 3.80%.
The decline in November’s US Core Personal Consumption Expenditure Price Index (PCE), the preferred inflation gauge of the Federal Reserve, has triggered speculation about early rate cuts by the Fed. This development has put downward pressure on the Greenback and provided support to USD-denominated gold. Current market sentiment, as indicated by the CME Fedwatch tool, suggests over 88% odds of a rate cut in March, with full pricing for a rate cut in May.
Wednesday’s data release disclosed that the US Richmond Fed Manufacturing Index for December was -11, below the prior figure of -5 and market consensus of -7. Thursday is expected to bring the release of weekly Jobless Claims figures from the US, with an anticipated increase of 210K in the week ending December 23.
In addition to US economic indicators, attention is drawn to China’s commitment to boosting domestic demand for economic recovery and stable growth. As the world’s leading gold consumer, positive developments in China’s economic conditions may further elevate gold prices.
Investors will closely monitor US weekly Jobless Claims, Trade Balance, and the November Pending Home Sales report on Thursday. Despite their release, the impact of these figures on the market may be limited.
