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Gold prices flat as US inflation data takes spotlight

Gold prices traded mainly flat on Wednesday as investors looked forward to a crucial U.S. inflation print that might affect chances of a widely expected Federal Reserve's interest rate cut next week and offer more hints on their 2025 outlook.

Area gold held its ground at $2,689.42 per ounce, as of 0904 GMT, having hit its greatest since Nov. 25 earlier in the session. U.S. gold futures rose 0.3% to $2,725.50.

Markets are focused on upcoming inflation numbers, with a. 25-basis-point Fed rate cut next week already priced in, said. StoneX analyst Rhona O'Connell, adding that attention will be on. Chair Powell's post-meeting commentary next week for further. policy insights.

The U.S. Consumer Price Index (CPI) information is due at 1330 GMT,. with the core CPI projected to have risen 0.3% on a. month-on-month basis and 3.3% each year.

An expected (CPI) number basically offers the Fed green. light to cut (rate of interest) next week which might be the. driver we need to see for gold, stated Kyle Rodda, financial. market expert at Capital.com.

According to the CME Group's FedWatch Tool, markets are. pricing an 86.1% possibility of a quarter-point rate cut next week.

Goldman Sachs flagged fewer Fed rate cuts as the main. downside threat to its 2025 year-end gold projection of $3,000 per. ounce, instead of a stronger dollar.

Gold would increase to simply $2,890/ toz if the Fed cuts only one. more time.

Bullion tends to benefit from lower rates of interest and. grows during economic and geopolitical turmoil.

Gold has actually been stagnant however is revealing signs of revival, with. a current rally driven by Syria's program modification and reports of. China resuming gold purchases, pushing costs to the upper end. of their range without breaking higher, O'Connell included.

Spot silver shed 0.6% to $31.71 per ounce, platinum. dropped 1.4% to $929.00 and palladium shed fell. 0.57% to $962.44.

(source: Reuters)