World gold prices almost moved sideways in the trading session on December 5, when US bond yields increased, overshadowing the impact of the weakening of the USD. The market is waiting for inflation data to be released later this week to predict the Fed's next move.
Spot gold prices increased slightly by 0.1%, to 4,210.49 USD/ounce, while February gold futures on COMEX increased by 0.2%, closing at 4,243 USD/ounce.
Mr. Edward Meir - an analyst at Marex - commented: "Increased yields are limiting gold's upward momentum, while a weaker USD is a supporting factor in the opposite direction".
The yield on the 10-year US Treasury note has increased, while the USD index hit a one-month low, making gold more attractive to foreign investors.
The latest data shows that the number of initial unemployment claims in the US fell to 191,000 last week - a three-year low and significantly lower than the forecast of 220,000 claims. The ADP report said the US private sector lost 32,000 jobs in November, its biggest decline since mid-2022.
According to a survey of more than 100 Reuters economists, the majority predict the Fed will cut interest rates by 0.25 percentage points at the meeting on December 9-10, to support the cooling labor market.
Lower interest rates are often beneficial for non-yielding assets such as gold, helping the price of this precious metal remain stable around the historical peak.
Investors are now focusing on waiting for the personal consumption expenditure (PCE) report - the Fed's preferred inflation measure - to be released on Friday, for further signals on upcoming monetary policy.
The market will likely be quite quiet until the Fed meets next week. With gold, prices are likely to move sideways within a narrow range and are unlikely to return to a peak of nearly $4,400/ounce this year," Mr. Edward commented.
Meanwhile, silver prices fell 2.6%, to 56.96 USD/ounce after hitting a record of 58.98 USD/ounce on December 4. However, since the beginning of the year, silver has increased by nearly 97%, thanks to a shortage of supply, liquidity concerns and the metal being included in the list of strategic minerals of the US.
