Dec 27, 2023: Gold prices remained stable during Asian trade on Wednesday, holding within a narrow range as the market retained its optimistic outlook on early Federal Reserve interest rate cuts, contributing to a robust climb in prices observed throughout December.
The precious metal surged past significant thresholds in recent sessions, currently trading just under $100 shy of its record high established earlier in the month. This recent upswing in gold’s value was sparked by the Fed’s announcement signaling the conclusion of interest rate hikes, with intentions to reduce lending rates in 2024.
Market sentiment leans towards a projection of Fed rate cuts as early as March 2024, especially following data revealing a sustained decrease in U.S. inflation.
Spot gold maintained stability at $2,064.84 an ounce, while February’s gold futures experienced a 0.3% increase, reaching $2,075.85 an ounce by 01:14 ET (06:14 GMT).
Anticipated Gains in 2023: The accumulation of gains through December indicates an expected rise of 12% to 14% in gold prices over the course of 2023.
However, gold’s performance lags behind most high-risk assets, notably stocks, primarily due to the continued elevation of U.S. interest rates. Comparatively, the S&P 500 appeared positioned to achieve approximately a 24% increase in value over the year 2023.
