Gold Price News: Gold Ticks Higher in Range Bound Trading

Gold prices were fractionally higher on Friday but were otherwise range bound in what proved to be a rather flat week for the yellow metal.

Prices moved in a range of $2,614 to $2,647 an ounce on Friday, compared with $2,634 an ounce in late deals on Thursday. The modest uptick on Friday capped a lacklustre week for gold, with prices struggling to break out of a narrow band of between $2,600 and $2,660 an ounce.

Opposing forces in balance

Gold prices have to some extent been caught between two opposing forces in recent days.

On the one hand, the markets are pricing in an increasing probability of a further interest rate cut by the US Fed this month, which other things being equal, is a positive driver for gold prices. Data from interest rate traders indicates an 85% chance of a 25-basis-point cut on December 18^th, compared with around 78% just a few days ago, according to data from the CME FedWatch tool: CME FedWatch – CME Group.

Interest in ETFs fades

On the other hand, other figures show that investment into gold ETFs has looked less resilient in November, contrasting sharply with strong net inflows in October. The week to November 29^th showed only 4.5 tonnes of net inflows in total, following a previous week of only 3.2 tonnes of net inflows, and net outflows of 23.6 tonnes in the week to November 15^th, according to World Gold Council data: Gold ETF: Stock, Holdings and Flows | World Gold Council. That compared with the week ending October 18^th which saw net inflows of 23.9 tonnes.

The investment data suggest the markets are much less convinced that gold prices have further upside potential, and certainly reflect doubts that the pace of gains seen earlier in 2024 can be sustained indefinitely.

In addition, the markets are worried that the US economy under the incoming Trump administration will be characterised by increased trade tariffs and other inflationary policies that could stymie the chances of further interest rate cuts emerging in 2025 – a bearish element for non-yield-bearing precious metals.