Thursday, [28/11/2024] — Gold prices (XAU/USD) edged higher from an intraday low near $2,620 during early European trading but struggled to gain significant momentum. A mix of geopolitical concerns and economic factors kept traders cautious, particularly with reduced trading volumes due to a U.S. holiday.
Investor sentiment remained cautious as geopolitical tensions and trade-related concerns offered some support to gold. Persistent worries about the ongoing Russia-Ukraine conflict and U.S. President-elect Donald Trump’s proposed tariffs heightened fears of a global economic slowdown. These uncertainties fueled demand for the safe-haven precious metal.
However, gold’s upward movement was capped by a rebound in U.S. Treasury bond yields, driven by encouraging economic data. Rising yields bolstered the U.S. dollar, which typically exerts downward pressure on non-yielding assets like gold.
Economic Calendar on 27th November 2024
Key data released on Wednesday added to the mixed market sentiment:
- The Personal Consumption Expenditures (PCE) Price Index, a key inflation gauge, rose to 2.3% in October, up from 2.1% in September, while core PCE climbed to 2.8%, signaling persistent inflationary pressures.
- The U.S. economy grew at an annualized rate of 2.8% in the third quarter, according to the Commerce Department, supported by a strong 3.5% rise in consumer spending.
- Weekly jobless claims fell to 213,000, reflecting a robust labor market, although a modest uptick in durable goods orders slightly tempered the optimism.
Market attention also turned to the Federal Reserve’s monetary policy stance. The latest data suggests the Fed could slow the pace of rate cuts if inflation remains elevated, providing further support for the U.S. dollar.
Geopolitical developments added to the cautious mood in the markets. President-elect Trump reiterated plans to impose tariffs on imports from Mexico, Canada, and China, fueling concerns about heightened trade tensions. These policies, coupled with inflationary risks, kept investors focused on safe-haven assets.
Outlook:
While geopolitical uncertainties continue to support gold, a positive risk tone and dollar strength are likely to limit significant gains. Analysts caution that thin trading volumes could lead to volatile price movements in the near term, as markets assess the impact of economic and political developments.
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