Gold delivers a weekly positive close on Fed pivot anticipation
gold closed with a weekly gain of nearly 1.10% at $2002.85 as traders look forward to a possible Fed pivot. The metal gained 0.60% Friday.
S&P Global US PMI data was released Friday. US manufacturing PMI (November preliminary) at 49.40 trailed the forecast of 49.90, however, services and composite PMI at 50.80 and 50.70, respectively topped the respective estimates of 50.30 and 50.40.
The US Dollar Index fell despite overall encouraging US data on risk-on sentiments as wider markets were up. The US Dollar Index edged lower by 0.34% to close at 103.42 Friday. The Index was down around 0.50% on the week.
Soft landing notions and better-than-expected European PMIs are also hurting the Greenback.
Ten-year US yields at 4.47% were up by 2 bps Friday, and were up approximately 1% on the week. Similarly, the two-year yields were up by 2 bps Friday and closed around 1.25% up on the week to close at 4.96%.
Total known global gold ETF holdings fell 0.06 MOz in the week through November 23.
Gold buyers are looking at the possibility of the Federal Reserve pivoting next year, which is keeping the metal bid.
Markets anticipate the first Fed rate cut in May.
However, considering the fact geopolitical tensions are subsiding and the latest European and US PMIs have been encouraging, the metal is quite overextended. In addition, core PCE deflator inflation data of the US remains at double the Fed's target of 2%. With expanding services PMI and a decent job market, the probability of a 100 bps rate cut next year can easily decline with some encouraging macroeconomic US data.
