Gold price leaps high on dovish Fed bets, deteriorating US yields

Gold was trading closely to the $2,070 level, registering strong gains, on early Thursday the precious metal is trading at $2086.45 per ounce. Markets project as many as six Fed rate hikes in 2024, which shook down the US Treasury yields.


US Jobless Claims on Thursday may fuel further volatility in the bond market. In Wednesday’s session, Gold Spot price jumped towards $2,070, marking a 0.50% gain. This essentially was in response to growing speculation of dovish bets towards the Federal Reserve, coupled with yields seemingly stuck in multi-month lows, which favored the yellow’s metal advance.

With the US Personal Consumption Expenditures (PCE) price index seeing a sizeable drop in November, optimism is growing for potential initial rate cuts from the Federal Reserve at the beginning of next year. This also comes after consecutive decelerating Consumer Price Index (CPI) readings alongside the Fed officials forecasting 75 bps of easing in 2024, which applied pressure to the US Dollar and the US bond yields. According to the CME FedWatch Tool, markets place bets on 15% odds of a cut in January and are pricing in 50 bps of easing between March and May.