Gold prices mixed as investors evaluate US inflation data

Gold prices were mixed in early trading on Wednesday, amid rising geopolitical tensions and expectations of a further interest rate cut by the US Federal Reserve next week after US inflation report released in the day.

According to CNBC, spot gold fell 0.59% to $2,677.72 an ounce, after touching its highest level since November 25 at the start of trading, while US gold futures rose 0.6% to $2,735.10.

Investors are focusing on the US consumer price index, which is expected to increase by 0.3% in November. The data could help shape the Fed’s monetary policy outlook for 2025.

“The expected CPI number could give the Fed the green light to cut rates next week, which could be the catalyst gold needs,” said Kyle Rodda, a financial markets analyst at Capital.com.

The Fed is expected to cut rates by 25 basis points on Dec. 18, according to 90 percent of economists surveyed by Reuters, with most expecting a pause in late January due to concerns about inflation risks.

On the geopolitical front, the Israeli military said it targeted most of Syria’s strategic weapons stockpiles and bombed two Syrian naval facilities, while South Korea’s Yonhap news agency reported that South Korean police raided the presidential office due to martial law.

Gold is considered a safe-haven investment during economic and geopolitical crises, and typically thrives in a low-interest-rate environment. Central bank buying, loose monetary policy and geopolitical tensions have pushed gold to multiple record highs this year, putting it on track for its best performance since 2010, up nearly 31% so far.

Goldman Sachs Group Inc. on Tuesday reiterated its bullish stance on gold prices, rejecting claims that the metal cannot reach $3,000 an ounce by the end of 2025 even in a world where the dollar remains strong.

Spot silver added 0.1% to $31.93 an ounce, while platinum rose 0.5% to $947.55 and palladium gained 0.7% to $975.19.