Gold prices receive a slight boost from the revised US inflation reading

Gold prices rose slightly after suffering heavy losses last week, in light of a weaker inflation reading in the United States, despite caution after the Federal Reserve’s hawkish stance, according to the Investing platform.

Global gold prices rise

Spot gold values ​​increased 0.2% to $2,626.65 per ounce, while gold futures contracts expiring in February fell 0.1% to $2,642.32 per ounce.
The yellow metal lost 1% last week after Federal Reserve officials expected smaller interest rate cuts in 2025 in the face of inflation. This tightening trend strengthened the US dollar and created downward pressure on gold prices.
Gold prices hit their lowest level in a month on Wednesday as markets lowered their expectations for the number of interest rate cuts the Federal Reserve may make in 2025.

Market expectations for gold and interest

Markets now expect the first rate cut of 2025 to come in June and are pricing in proportion to two cuts next year, according to CME FedWatch.
Higher interest rates put downward pressure on gold as the opportunity cost of holding gold increases, making it less attractive compared to interest-bearing assets such as bonds.
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US data released on Friday showed that the personal consumption expenditures price index, the Federal Reserve’s preferred measure of inflation, rose 0.1% in November, a slower pace than the 0.2% increase in October. Thus, the annual personal consumption expenditures inflation rate rose to 2.4%, which is Just below the estimate of 2.5%.

US inflation level

However, the annual rise in core inflation excluding volatile food and energy prices remained at 2.8%, well above the central bank’s target of 2%.
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Prices of other precious metals rose, with platinum futures increasing 0.8% to $940.15 per ounce, while silver futures rose 0.6% to $30.137 per ounce.
Copper prices rise as US inflation weakens, and markets await Chinese stimulus.
Among industrial metals, copper prices rose slightly after falling more than 1% last week as weak US inflation data boosted sentiment.
The red metal was also under pressure from the strength of the dollar after the Federal Reserve meeting.

Chinese measures push prices

Markets are awaiting details of new stimulus measures in China, with recent reports indicating that Beijing will ramp up fiscal stimulus next year.
China is the largest importer of copper in the world.
Copper futures on the London Metal Exchange rose 0.3% to $8,978.50 per ton, while one-month copper futures rose 0.6% to $4.1227 per pound.