Gold prices held steady, recovering from a sharp drop of over 3% the previous day, as market participants digested concerns over trade tensions and speculation regarding U.S. Federal Reserve policy.
As of 0614 GMT, spot gold remained at $2,624.41 per ounce, having bounced back from earlier lows that marked the lowest levels since November 18. U.S. gold futures also showed a modest gain, rising 0.2% to $2,624.70 per ounce.
“Despite the significant sell-off yesterday, gold has held up relatively well, which suggests some safe-haven demand,” said Matt Simpson, senior analyst at City Index. He added, “We could see more turbulence ahead, especially with Trump back in focus.”
The market’s focus remains on U.S. President-elect Donald Trump’s proposed tariffs on all imports from Canada, Mexico, and China, which have stoked fears of escalating trade wars. Gold, often viewed as a safe-haven asset during times of economic or geopolitical uncertainty, is benefiting from this renewed risk aversion.
On the domestic front, Federal Reserve Bank of Minneapolis President Neel Kashkari, typically seen as a hawkish member of the U.S. central bank, indicated he was open to the idea of further rate cuts next month. This comment added to market expectations of monetary easing, with the CME Group’s FedWatch Tool currently estimating a 55.9% chance of a 25-basis-point rate cut in December.
Markets will be closely watching U.S. economic data, including consumer confidence figures and the minutes from the Fed’s November meeting, set to be released later today. Additionally, key economic revisions, including GDP growth and core PCE data, are expected later this week.
Simpson noted that while gold is likely to trade within a narrow range in the near term, there could be a slight upward drift.
Meanwhile, geopolitical developments continue to impact market sentiment. U.S. President Joe Biden and French President Emmanuel Macron are expected to announce a ceasefire in Lebanon between Hezbollah and Israel, according to senior Lebanese sources.
In other precious metals, spot silver remained unchanged at $30.31 per ounce, platinum edged down 0.1% to $937.55, and palladium held steady at $973.36 per ounce.
As the market navigates both economic and geopolitical challenges, gold and other safe-haven assets are likely to remain in focus for investors in the coming weeks.
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