Gold Price News: Gold Rises to Close Out Week With 5% Gains

Gold prices made further gains on Friday to cap a decidedly bullish week for the precious metal, as the markets assessed the outlook for lower interest rates as well as ongoing geopolitical tensions.

Prices climbed as high as $2,710 an ounce on Friday, up from around $2,670 an ounce in late trades on Thursday. Gold powered higher through the whole week, gaining just under 5%, having traded as low as $2,571 an ounce on November 18th. However, gold starts the week on a more bearish note, trading at around $2,670 an ounce on November 25th.

Market weighs outlook for lower rates

Gold appeared to take support from comments by Federal Bank of Chicago President Austan Goolsbee on Thursday who said he sees interest rates moving ‘a fair bit lower’ over the coming months. This was linked to inflation showing signs of coming down progressively towards the US Fed’s target of 2%, he said, according to news reports this week.

Lower interest rates tend to support assets like gold, which provide no yield. The markets are broadly expecting the US Fed to cut rates by 25 basis points at its next meeting on December 18, although traders have scaled back bets on this outcome over recent days.

Gold supported by conflict risk

Elsewhere, precious metals prices continued to take support from ongoing tensions over the Russia/Ukraine conflict after Russia launched a ballistic missile into Ukraine in response to its recent use of longer-range missiles against Russian territory. Any actions that appear to escalate the conflict tend to increase flows into perceived safe havens like gold.

Gold’s surge last week was all the more remarkable for having come at a time when the US dollar rose against other major currencies – normally a bearish factor for dollar-denominated gold prices. The latest gains for gold come in the context of a two-month low of $2,538 an ounce seen on November 14^th.

Upcoming events

Monday will see the release of German Ifo Business Climate Index figures for November, for an update on Europe’s largest economy. The figures may be closely watched this month, as the indicator showed an increase in October for the first time in five months. Further out, Tuesday is looking somewhat light on data releases, and the markets will be anticipating Wednesday’s monthly US PCE price index, US durable goods orders for October, and US GDP growth rate for Q3, for the latest pulse-check on the US economy.