Gold holds above $2,700 as softer US Dollar fuels optimism
Gold prices are trading flat as the European session begins, holding above the $2,700 level and remaining close to the one-month high reached during the previous session. The precious metal has benefited from a weakening US dollar following the release of US inflation data for November, which came in lower than expected. Traders are increasingly adopting the view that the Fed will raise rates only once in 2025, given the US economy's remarkable resilience. This resilience, coupled with expectations that likely protectionist policies from the incoming Trump administration could drive inflationary pressures, supports higher Treasury yields and a stronger dollar, which typically weigh on non-yielding assets like gold. However, this week's inflation data, with PPI and CPI readings falling short of forecasts, has softened the dollar. As a result, gold prices have rebounded, surpassing the $2,700 mark for the first time since early December.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
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