FX.co ★ Gold on Track for Weekly Rise

Gold traded at approximately $4,320 per ounce on Friday, hovering close to its record peak from October and poised for a second consecutive weekly increase. This rise comes in the wake of lower-than-anticipated U.S. inflation figures, which bolstered expectations for subsequent interest rate reductions. Specifically, November's inflation decelerated to 2.7%, undercutting estimates of 3.1%, while core CPI registered at 2.6%, marking its slowest growth rate since March 2021. These figures have reinforced the view that inflationary pressures are abating, making a strong case for potential rate cuts by the Federal Reserve. Nonetheless, the interpretation of this data was constrained by the federal shutdown, which interfered with the Bureau of Labor Statistics’ ability to gather October's pricing data and conduct month-over-month comparisons. Currently, markets estimate a roughly 25% probability of a rate cut in January, with a high likelihood of such a move by April. Additionally, geopolitical concerns have contributed to gold's appeal, following the U.S. suspension of sanctioned Venezuelan oil shipments after a tanker was seized, and President Putin's reaffirmation of territorial claims in Ukraine. Gold has surged about 65% this year, marking its most significant annual gain since 1979.