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Gold prices set for a weekly gain as China resumes buying


gold price

REUTERS: Gold prices edged higher on Friday and were set for a weekly gain, driven by reports of top consumer China resuming gold purchases, and heightened expectations of an interest rate reduction by the Federal Reserve at its December 17-18 meeting.

Spot gold was up 0.3 per cent at $2,688.29 per ounce, as of 0320 GMT. Bullion is headed for a weekly gain and has added more than 2 per cent so far this week.

US gold futures were steady at $2,711.30.

Traders’ attention is now on the Fed’s decision on interest rates, and they see a 96.4 per cent chance of a 25-basis-point (bp) cut, CME’s FedWatch Tool showed.

“I think the Fed will deliver the expected 25-bp cut, and the dot plot will shift to a less-dovish stance. While this could initially weigh on gold next week, it shouldn’t come as a huge surprise,” Matt Simpson, a senior analyst at City Index said.

The European Central Bank cut interest rates for the fourth time this year and the Swiss National Bank cut its interest rate by 50 basis points, its biggest reduction in almost 10 years on Thursday.

The bullion thrives in a low-interest-rate environment.

Spot silver was unchanged at $30.94 per ounce.

Platinum gained 0.4 per cent to $933.65 and palladium fell 0.1 per cent to $969.09. Both metals were set for weekly gains.

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