Gold Nears $2,040 Amid Rate Cut Hopes
Solid ECN – Gold climbed to near $2,040 per ounce on Thursday. It recovered from earlier losses, driven by strong beliefs that the US Federal Reserve will reduce interest rates next year. Also, a big drop in stocks created a demand for safe investments like gold.
Even though Federal Reserve officials opposed the idea of many rate cuts next year, the market still thinks there's a 70% chance of a rate cut in March. Investors are now waiting for US economic growth data on Thursday and the core personal consumption expenditures (PCE) index on Friday for more clues. In the UK, inflation in November fell to its lowest in over two years, suggesting a possible worldwide trend of rate cuts. In other news, the Bank of Japan kept its very relaxed monetary policy, and the People’s Bank of China did not change its main lending rates.