Gold Fundamental Analysis
Bloomberg—Gold moved up to about $4,150 per ounce on Wednesday, staying close to its highest level in almost two weeks. The rise came after delayed economic data strengthened hopes for a Federal Reserve rate cut in December.
Moreover, the latest numbers show weaker consumer activity, as retail sales increased only 0.2% in September after a stronger rise in August. This points to softer spending. At the same time, producer price data showed that inflation is still largely in line with expectations.
In addition, several Fed officials recently signaled support for a rate cut next month due to ongoing weakness in the job market. Because of this, markets now see more than an 80% chance of a 25 bps cut, compared to 50% just a week ago.
However, gold’s gains are limited as geopolitical risks ease. Ukrainian officials agreed to a plan aimed at ending the war with Russia, lowering the demand for safe-haven assets.
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