Gold prices rose today during weak trading due to the Christmas holiday in many countries and in light of the decline in the dollar and bond yields, due to growing expectations that the US Federal Reserve (central bank) will reduce interest rates in March. The tension in the Middle East due to the continued Israeli aggression on the Gaza Strip also prompted investors to turn to gold as a safe haven.
In Tuesday’s trading, spot gold rose 0.5% to $2,063.22 per ounce – at the time of preparing this report – after recording the highest level in more than two weeks at $2,070.39 in the previous session.
US gold futures rose 0.25% to $2,074.20 per ounce, and lower interest rates would reduce the opportunity cost of possessing non-yielding bullion.
Traders highly expect, at a rate of 89%, that the US Federal Reserve will cut interest rates in March, according to the CME and Fed Watch tools.
The dollar index fell 0.04% to 101.66 points, making gold more attractive to holders of other currencies, while the benchmark 10-year US bond yield fell to 3.882%.
Prices decline
Data released last Friday showed that prices in the United States fell in November, compared to the previous month, for the first time in more than 3 and a half years, and the annual increase in inflation fell further below 3%, which strengthened market expectations of a Federal Reserve rate cut in March. Next March.
The US army launched retaliatory air strikes in Iraq after a bomb-laden drone attack yesterday, Monday, by gunmen affiliated with Shiite factions supporting Gaza, which resulted in the injury of 3 American soldiers. Iranian military advisor Radhi Mousavi was also killed in Syria in an Israeli air strike on the outskirts of the Syrian capital, Damascus, yesterday. Which indicates the expansion of geopolitical tensions that began after the Al-Aqsa Flood operation launched by the Palestinian resistance against the Israeli occupation, which portends the expansion of the war with the continuation of the aggression on Gaza and the threats of the Yemeni Houthi group to close the Bab al-Mandab Strait at the entrance to the Red Sea from the south.
Gold is seen as a safe-haven asset in times of geopolitical uncertainty.
Markets in Australia, New Zealand, Hong Kong and the euro zone were closed on Tuesday for the Christmas holiday.
Regarding other precious metals, silver rose in spot transactions 0.6% to $24,344 per ounce, platinum increased 0.46% to $975.10, and palladium fell 0.7% to $1,194.09, at the time of preparing this report.