The precious metals market witnessed a significant upturn on Monday, December 9, 2024.
Gold prices climbed notably, driven by two key factors.The Peoples Bank of China (PBoC) resumed its gold purchases after a six-month break.
Investors also anticipated a potential interest rate cut by the Federal Reserve in the coming week.February gold futures on the Comex division of the New York Mercantile Exchange closed at $2,685.80 per troy ounce.
This marked a 0.99% increase from the previous trading session.The surge reflected renewed confidence in the metals value as a store of wealth.
Chinas central bank data revealed its return to gold buying in November.
This move ended a pause that began in May 2024.UBS analysts view Chinas absence from the gold market as merely temporary.
They suggest that the PBoCs renewed interest will bolster gold prices after recent declines.Gold Surges as China Resumes Purchases and Fed Rate Cut Looms.
(Photo Internet reproduction)UBS predicts continued gold accumulation by central banks, particularly in emerging markets.
This trend is expected to drive prices higher.
The Swiss bank forecasts gold trading at $2,900 per troy ounce by the end of 2025.Gold Market Outlook Amid Economic ShiftsThis projection signals strong long-term confidence in the metals value.
XS.com analysts note that Chinese purchases may offset reduced safe-haven demand.Easing geopolitical tensions in the Middle East and a robust United States economy have lessened golds appeal as a risk hedge.
However, Chinas actions could maintain the metals attractiveness to investors.Market attention is also focused on the Federal Reserves upcoming decision.
The CME Groups FedWatch tool shows strong expectations for a rate cut.There is an 85.8% probability of a 25 basis point reduction, versus 14.2% for no change.
The Fed will announce its decision on Wednesday, December 18.A rate cut would likely further boost gold prices.
Lower interest rates typically increase the appeal of non-yielding assets like gold.
This environment could attract more investors seeking alternatives to low-yield bonds and savings accounts.The gold markets response highlights its sensitivity to global economic policies.
It also underscores the metals enduring role as a strategic asset for central banks and investors alike.
As economic uncertainties persist, gold continues to shine as a beacon of stability in turbulent financial waters.