Summary:
A retreat in the US dollar drove a 1% rise in gold prices on Friday. The Fed cut interest rates by 25 bps as expected this month.
Gold prices steadied 1% on Friday following a rebound in the previous session which was fuelled by a retreat in the US dollar. The Fed cut interest rates by 25 bps as widely expected this month.
Policymakers are assessing the economic shifts expected when Trump takes office next year, although they don't anticipate any "near-term" changes to monetary policy.
Currently, both inflation and interest rates are steadily trending down. Traders are factoring in another 25 basis point rate cut by the Fed in December, per LSEG data.
Global physically-backed ETFs continued to see inflows for a sixth consecutive month in October, with year-to-date flows turning positive for the first time this year, largely due to North American and Asian demand, according to the World Gold Council.
China’s central bank has not added gold to its reserves for the sixth month in a row as of October, with its gold share still below the global average.
Gold prices have surged roughly 33% this year, marking the biggest annual gain since 1979. However, Trump's policies, seen as favorable to the dollar, may pose a challenge to gold's bullish run.
The yellow metal traded around the 2,700 level but remained above 50 SMA, so it is premature to call an end to its uptrend. The first hurdle lies at 2,750.
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