Gold rises for fifth day as US data lifts Fed rate-cut bets

Gold nudged higher for a fifth straight session on Thursday to hover near a more than two-week peak, supported by increased expectations of an interest rate cut from the Federal Reserve next week after U.S. inflation data came in line with forecast.

FUNDAMENTALS

* Spot gold was up about 0.1% at $2,719.79 per ounce, as of 0035 GMT. U.S. gold futures steadied at $2,755.40.

* U.S. consumer prices increased by the most in seven months in November, but that is unlikely to discourage the Fed from cutting interest rates for a third time next week against the backdrop of a cooling labor market.

* Traders predict a 98.6% chance of a 25-basis-point cut at the Fed’s Dec. 17-18 meeting, CME’s FedWatch Tool showed. * Focus now shifts to U.S. Producer Price Index data, due for release at 1330 GMT, for insights into Fed’s monetary policy for 2025.
* Meanwhile, the European Central Bank is all but certain to cut interest rates again on Thursday and signal further easing in 2025 as inflation in the euro zone is nearly back at its target and the economy is faltering.
* The bullion is seen as a safe investment during economic and geopolitical turmoil and thrives in a low-interest-rate environment.
* Elsewhere, the United Nations General Assembly overwhelmingly voted on Wednesday to demand an immediate, unconditional, and permanent ceasefire between Israel and Palestinian militants Hamas in the Gaza Strip and the immediate release of all hostages.

* Citi said in a note that gold and silver markets are set to resume gradual uptrend over 3-12 months, reaching $3,000/oz and $36/oz respectively.

* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.30% to 873.38 tonnes on Wednesday from 870.79 tonnes on Tuesday.

* Spot silver added 0.1% to $31.94 per ounce, platinum gained 0.4% to $943.10 and palladium rose 0.5% to $986.25.

DATA/EVENTS (GMT) 1315 EU ECB Refinancing Rate Dec 1315 EU ECB Deposit Rate Dec 1330 US Initial Jobless Clm 7 Dec, w/e 1330 US PPI Machine Manuf’ing Nov.