Gold prices rose on Wednesday and hit the highest level since May, as Fed officials’ comments boosted bets that it would begin cutting interest rates next year.
The dollar’s exchange rate slumped as U.S. Treasury bonds rose during November after Fed Governor Christopher Waller, one of the most monetary-leaning officials, said monetary policy was working well to restore inflation to the central bank’s 2% target, suggesting there is no need to raise interest rates again.
The impact of low borrowing costs is usually negative for non-yielding alloys.
Gold bullion prices have risen more than 12% since early October, initially driven by a safe haven purchase aimed at hedging after the conflict between Israel and Hamas.
Investors intend to closely monitor U.S. economic data this week, including the Fed’s preferred core inflation index, to try to determine the most appropriate direction for interest rates.
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