Gold Price: Shine in Turbulent Times

Gold prices reached a two-week high on Wednesday, driven by increasing geopolitical tensions and expectations of another interest rate cut by the U.S. Federal Reserve next week. These developments occur just before the release of the closely watched U.S. inflation report on the same day. As of now, the spot gold price is up 0.2% at $2,698.47 per ounce, marking its highest level since November 25. U.S. gold futures rose 0.6% to $2,734.70. At the center of investor interest is the U.S. Consumer Price Index (CPI), which is expected to have risen by 0.3% in November. This data could influence expectations for Fed monetary policy in 2025. According to financial market analyst Kyle Rodda of Capital.com, a CPI figure in line with expectations could give the Fed the green light for an interest rate cut next week, potentially acting as a catalyst for gold prices. According to a majority of 90% of economists surveyed by Reuters, the Fed is expected to cut interest rates by 25 basis points on December 18, with most anticipating a pause considering inflation risks at the end of January. On the geopolitical front, the Israeli military reported attacks on strategic weapons depots in Syria as well as two Syrian naval facilities, while South Korean police raided the presidential office over coup suspicions, reported the Yonhap news agency. Amid economic and geopolitical turbulence, gold is considered a safe investment and generally benefits from a low-interest-rate environment. Central bank purchases, monetary policy easing, and geopolitical tensions have repeatedly driven the precious metal to record highs, indicating the most successful year since 2010, with an increase of nearly 31%. Goldman Sachs reaffirmed its optimistic stance on gold prices on Tuesday, dismissing arguments that the precious metal could not rise to $3,000 per ounce by the end of 2025 in a world where the dollar remains strong. Spot silver rose by 0.1% to $31.93, platinum by 0.5% to $947.55, and palladium increased by 0.7% to $975.19.