Gold prices rose on Tuesday, extending the previous session’s gains, as investors increased bets that the U.S. Federal Reserve would cut interest rates in 2024 to boost a slowing economy.
Spot gold (XAU/USD) climbed 0.6% to $2,076.40 per ounce, building on last year’s 13% rise.
The precious metal has found support from expectations that cooling inflation and slowing economic growth will lead the Fed to cut rates, perhaps as soon as March. Traders are currently pricing in an 86% probability of a rate cut by March, according to the CME FedWatch tool.
Lower interest rates decrease the opportunity cost of holding non-yielding gold. Market focus this week is on the Fed’s latest meeting minutes, due on Thursday, along with U.S. jobs data on Friday. These could provide further clues on the timing of potential rate cuts.
