The price of gold rose by 1.2%, continuing yesterday's increase, which was caused by the weakening of the US dollar and a decrease in US bond yields. Investors are also preparing for the release of US inflation data, which will help clarify the trajectory of the Fed's interest rate.
The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) fell by 0.51% to 106.47, reaching a weekly low. Meanwhile, the yield on 10-year US Treasury bonds fell by 2.7 basis points to 4.275% (the lowest value since November 1).
The next catalyst for gold will be US data, namely core PCE figures, initial jobless claims and GDP (first revision), which will be published today at 13:30 GMT. Experts said that stronger than expected data may reduce the likelihood of easing the Fed's monetary policy at the December meeting. According to the CME FedWatch Tool, markets see a 66.5% probability of a 0.25% rate cut in December (compared to 55.7% a week ago). Non-yielding assets like bullion thrive in a lower interest rates environment and amid geopolitical uncertainties.
Overall, experts expect that the upward trend of gold will continue, given Trump's appointments and policies that pressure the Fed, increase deficits, escalate tariffs, or raise concerns about U.S. financial sustainability.