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by Reuters – Gold prices surged, topping $2,080 per ounce on Thursday. This marks its highest value in over three weeks. The rise came as the US dollar and Treasury yields saw a significant drop. This shift is tied to growing expectations that the US Federal Reserve will start reducing interest rates in the coming year.
Analysts are noting a slowdown in inflation and the Fed’s efforts to achieve a smooth economic adjustment as major influences behind these speculations. The market is now almost certain, at a 90% probability, that the Fed will lower rates in March. Furthermore, it’s predicted there could be a total decrease of up to 158 basis points in rates next year.
Gold’s performance this year has been remarkable, set to show more than a 14% increase. This would be its first yearly rise since 2020. Factors fueling this growth aren’t just limited to the anticipated interest rate cuts. Global conflicts, including the wars in Ukraine and Gaza, along with wider tensions in the Middle East, have bolstered gold’s appeal as a safe-haven asset.
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