The price of gold is seen to be comfortable at around $2,060 in the opening session of Asian trading early this morning. In this last week of 2023, the market moves quite slowly and has less impact on price movements. However, gold prices traded at $2,066, down 0.09% compared to yesterday.
We can also see the US Dollar weakening against some of its competitors. The US Dollar Index (DXY) fell to its lowest level since July near 101.45 points and the 10-year US Treasury yield showed little movement at 3.89%.
The market is now more confident about the actions of the Federal Reserve (Fed) to ease policy. According to WIRP, the market has now set a price target and a 15% cut is likely on January 31. Prices will also peak on March 20 with six price cuts by the end of 2024.
Now, traders will take more cues from the data that will appear at the beginning of next year. Lower interest rate setting by The Fed will continue to benefit gold to continue to push its price.
Last week, we could see the Core Personal Consumption Expenditure Price Index (Core PCE) data in November reached 0.1% on the month. It is still below the market consensus of 0.2%. On an annual basis, Core PCE showed an insignificant increase since April 2021 where it reached 3.2% on an annual basis compared to 3.4% in October. It did not reach market expectations of 3.3%.
In addition, the conflict in Yemen, the Red Sea continues to give concern about threats to the shipping industry. Iran also threatened to block the Strait of Gibraltar, which is the main route for ships from Europe. The conflict will continue to affect the rise in gold prices.
For now, gold traders will start watching geopolitical tensions in the Middle East, US Fed Richmond Manufacturing Index for December and Jobless Claims this week.
