Gold traded around $2,690 per ounce on Wednesday, pausing a two-day rally as investors adjusted their positions ahead of key US inflation data.
Gold pauses ahead of US inflation data
The report is pivotal, as it could influence expectations for a potential third Federal Reserve rate cut next week. A rate reduction would likely benefit gold by lowering the opportunity cost of holding non-yielding assets. Despite the pause, gold remained near two-week highs, supported by expectations of looser monetary policies from major central banks and growing demand for safe-haven assets.
Gold rises on rate cuts, China's policy, and middle east tensions
The ECB, SNB, and BoC are all anticipated to cut rates this week. Additionally, China's announcement of plans for a more accommodative monetary policy next year and the PBoC's resumption of gold purchases after a six-month hiatus added to the positive sentiment. Ongoing tensions in the Middle East, particularly reports of the Syrian regime's collapse and Israeli airstrikes, further bolstered gold's appeal as a safe-haven investment.
