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Gold exhibited stability during Friday’s trading on the seventeenth of November, poised to secure weekly gains amid heightened investor speculation surrounding the conclusion of the US Federal Reserve’s monetary tightening cycle.
Continuing its upward trajectory, the price of gold tested its highest point in eight days, nearing the $1990 mark.
Against the backdrop of this week’s economic indicators, the US Producer Price Index (PPI) experienced a notable decline in October, aligning with a 3.2% year-on-year contraction in the US Consumer Price Index (CPI) inflation.
The deceleration unveiled by this week’s economic data has fueled mounting expectations of the Federal Reserve putting a halt to its current monetary tightening cycle. This anticipation of a pause in the tightening cycle by the Federal Reserve has exerted downward pressure on the yields of US Treasury bonds, consequently contributing to a resurgence in gold prices.
Simultaneously, a decline in interest rates serves to diminish the opportunity cost associated with holding gold, traditionally sought as a non-yield-bearing asset and a safeguard against inflation.
In the realm of trading, gold fortified its weekly gains, surpassing $1980 early on Friday, with gold futures settling at $1986.9 per ounce. Over the course of the week, the precious metal witnessed a rise of approximately 2.5%.
Although the potential for upward movements in gold prices persists, the robustness of the US dollar poses a potential impediment.
Conversely, the US dollar is poised to log a weekly decline, rendering gold more affordable for purchasers utilizing other currencies.
