Gold price hits six-month high

By Rhod Mackenzie

Today at the start of the working week, the price of gold reached a six-month high.Reuters reports, the spot price for an ounce of gold rose by 0.4% on November 27th, hitting $2,009.69.
This is due to the devaluation of the US dollar. Additionally, there is a strong likelihood that the American Fed, will halt its efforts to combat inflation and maintain the discount rate at its present level by the year-end.

Gold futures in the US increased by 0.3% to $2,009.50 per ounce of the valuable metal. At the outset of the trading session, there was a sudden spike to $2017.82 per ounce, but subsequently, a correction took place resulting in a slight dip in the price.

"This week's release of economic data on inflation and economic growth from the United States will determine whether gold will maintain its value above £2,000 per ounce or if it will drop below this mark."

"The weakening of the dollar has led to an increase in the gold price," stated Kyle Rodda, a precious metals analyst at Capital.com. However, it is possible that the situation with gold may be a result of the thin trading market in Asia, he commented.

The dollar index slightly increased against other currencies, rising only by 0.1% and remaining close to the two-month low reached last week.
Currently, the market is eagerly awaiting the release of updated data on the US economy for the third quarter, scheduled to be published on Wednesday, 29th November. All eyes are also on the American core Personal Consumption Expenditure (PCE) index, slated to appear on the last day of the month.

Inflation in America was lower than expected in November, according to the published data. This favourable statistic has buoyed hopes that the Fed will begin to ease monetary policy sooner than anticipated. The overwhelming majority of traders anticipate that the Fed will abstain from adjusting the discount rate in December.

According to the CME FedWatch Tool investor expectations indicator, the likelihood of its decline commencing in May 2024 is now estimated at around 60%.

Traders and investors also observed Japan's adjusted PPI rose in October, which climbed to 2.3%. September's growth was lower, at 2%. The steady rise of this index has boosted the probability of Bank of Japan, finally scrapping the negative interest rate in 2024.

At the onset of the new working week, the spot prices of several other valuable metals increased. Consequently, silver climbed by 1.3% to $24.36 per ounce while an ounce of palladium increased by 0.1% to $1,069.85. However, the price of platinum experienced a slight drop – by 0.3% down to $927.64 per ounce.