Traders seem reluctant to place bullish bets on the USD and prefer to wait for the release of the US Core Personal Consumption Expenditures (PCE) Index, scheduled for the end of the North American trading session. The headline index is expected to dip to 2.8% YoY in November from the previous 3%. Meanwhile, the core figure, excluding volatile food and energy prices and considered the Fed's preferred inflation gauge, is predicted to decrease to 3.3% YoY from October's 3.5%.
With market expectations of an earlier Fed interest rate cut in 2024, immediate market reactions to softer indicators are likely to be minimal. Conversely, a stronger report could spur some USD short positions and weigh on gold prices against the USD.
However, any significant downside for precious metals seems limited in the context of the global interest rate-cutting outlook. This, in turn, suggests that the path of least resistance for the yellow metal, yielding low returns, remains a buying opportunity. Nonetheless, gold prices are still showing modest gains for the second consecutive week.
With market expectations of an earlier Fed interest rate cut in 2024, immediate market reactions to softer indicators are likely to be minimal. Conversely, a stronger report could spur some USD short positions and weigh on gold prices against the USD.
However, any significant downside for precious metals seems limited in the context of the global interest rate-cutting outlook. This, in turn, suggests that the path of least resistance for the yellow metal, yielding low returns, remains a buying opportunity. Nonetheless, gold prices are still showing modest gains for the second consecutive week.
