Gold was trading high at the opening of today's market session following the fall in U.S. Treasury Yields. Gold trading volume is expected to be flat following the arrival of the Christmas holiday this weekend.
Market sentiment is still expecting a high probability of an aggressive interest rate cut by the Fed next year, and this keeps demand for gold high. However, the Fed member's recent statement regarding the potential for moderate interest rate cuts to be implemented next year has resulted in gold investors currently taking cautious steps and at the same time resulting in gold prices being seen as lacking upward momentum.
What is certain is that market investors are now looking forward to the important data that will be published tomorrow, namely "Personal Consumption Expenditures (PCE)" for November production. This data is the main data used by the Fed in evaluating the current inflation rate in America. In addition, tonight the "Gross Domestic Product (GDP)" data for the third quarter report series will be published. These two data are able to provide an indication of the Fed's plans in the direction of interest rates in the next year. And it is able to provide a strong stimulus to the gold market.
Bullish or Bearish?
Based on the current market sentiment at this point regarding the direction of the Fed, and current economic data, the gold market is still bullish. However, following the statement of Fed members Austan Goolsbee and Loretta Mester, has made investors more cautious, and this can have a "pull-back" impact on gold. The GDP and PCE data that will be published can "totally" change the current market sentiment.
