The price of gold is now showing an increase for the third week in a row after the United States (US) inflation component data which is the PCE index showed a weak increase.
However, investors are now more focused on betting on interest rates in the US and the speech of the Chairman of the Federal Reserve (Fed), Chair Powell at the end of this week.
The spot gold market rose 0.2% to $2,039.42 an ounce after surging above $60 in November for two straight months. Gold is expected to continue to rise next February by 0.1% to $2,059.
According to City Index Senior analyst, Matt Simpson said that if traders are confident about the Fed's interest rate cut in 2024. They should also be confident that PCE inflation will move slower and that will obviously give gold prices an opportunity.
Yesterday's data showed US consumer spending rose modestly in October and the annual increase in inflation was the slowest in 1 to 2 years.
Insignificant inflation movements and a subdued labor market prompted the Fed to end its interest rate hike campaign and cut them in the coming months.
Many traders are now placing their bets that the US central bank will cut interest rates in May and this will reduce the cost for holders of interest-free gold.
The movement of the dollar index (DXY) and the 10-year treasury yield showed the weakest monthly performance of the year.
