On December 12, gold prices surged significantly during the U.S. afternoon session, driven by silver's consecutive record highs. The strong performance of silver not only boosted capital inflows into the precious metals sector but also reinforced sustained technical buying. Moneta Markets FX noted that the synchronized rally in gold and silver reflects heightened investor interest in precious metals amid a dovish macro policy stance and a six-week low in the U.S. dollar index, with technical breakouts accelerating upward momentum.
The Federal Reserve, as expected, cut rates by 0.25%—marking the third consecutive reduction—bringing the federal funds rate to a range of 3.5% to 3.75%. While the 9-3 vote revealed increased uncertainty about future rate cuts, the Fed unexpectedly announced a $40 billion monthly Treasury bill purchase starting Friday to ease short-term funding pressures and inject liquidity. Moneta Markets FX stated that markets had anticipated a potentially hawkish tone despite the rate cut, but the asset purchase plan clearly reinforced dovish signals, overshadowing any tightening rhetoric. Following the announcement, U.S. stocks rose sharply, the dollar weakened, Treasury yields declined, and gold and silver extended gains post-press conference. This reaction underscores investor sensitivity to renewed liquidity, making precious metals more attractive to trend-following and institutional capital.
In related markets, oil prices retreated to around $57.25 per barrel amid cautious global demand expectations, while the 10-year Treasury yield hovered near 4.14%, enhancing gold's appeal as a non-yielding asset. Moneta Markets FX highlighted that weaker energy prices, a pressured dollar, and declining yields create a solid support structure for precious metals, sustaining gold and silver's strength. Looking ahead, if the Fed maintains liquidity injections and a dovish stance, further upside potential remains, though short-term overheating sentiment may increase volatility.
Comments