Gold is trading near $1,800 an ounce as the precious metal benefited from the US dollar sinking to multi-month lows and mounting expectations that the Federal Reserve will be less aggressive with its upcoming interest rate moves both this month and into the new year.
Gold is back in favour in the final month of a year in which the asset has struggled in the face of a series of large interest rate hikes by the Fed and a strong dollar. Now with both those factors fading, allied to general market jitteriness about the global economic impact of China’s sustained lockdowns as well as the fallout in crypto markets following FTX’s collapse.
As a result, gold has enjoyed a great run of gains that has seen the price climb by more than $150 an ounce in the last month to now be trading at levels last seen in August. How long the precious metal can hold onto these gains will depend on how much the Fed decides to increase its benchmark rate next week, with the majority now expecting a 50 basis point hike.
Assuming the Fed matches market expectations then gold can see out the year on a buoyant note but any hint of further aggression from the US central bank is needed to tame inflation could see the price tumble down once again.
Rupert is a Market Analyst for Kinesis Money, responsible for updating the community with insights and analysis on the gold and silver markets. He brings with him a breadth of experience in writing about energy and commodities having worked as an oil markets reporter and then precious metals reporter during the seven years he worked at Bloomberg News.
As well as market analysis, Rupert writes longer-form thought leadership pieces on topics ranging from carbon markets, the growth of renewable energy and the challenges of avoiding greenwash while investing sustainably.
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