On December 19, London spot gold saw intensified fluctuations overnight. Following the release of US CPI data, prices surged rapidly, with gains briefly expanding to nearly 1% before retreating. COMEX gold futures fell by 0.25%, while SHFE gold edged up slightly by 0.02%.
The latest US inflation data has reinforced expectations of interest rate cuts, with gold prices maintaining a relatively strong trend amid a dovish market sentiment. Investors are now closely watching the Bank of Japan's next move.
Overnight, US November CPI figures were released, with both headline and core inflation significantly below expectations. The headline CPI rose 2.7% year-on-year, lower than the anticipated 3.1%, while core CPI increased by 2.6%, also below the previous reading and market forecast of 3%. This further signals easing inflationary pressures.
The data has strengthened market expectations of a dovish shift by the Federal Reserve, with predictions of continued rate cuts in 2026 gaining traction. Meanwhile, the US President stated that the next Fed chair must be "ultra-dovish," with an announcement expected soon—raising renewed concerns over the central bank's policy independence.
The European Central Bank, in its Thursday meeting, opted to keep interest rates unchanged for the fourth consecutive time. Market focus now shifts to the Bank of Japan's upcoming decision.
Amid the prevailing loose monetary environment, gold prices remain resilient. While market expectations of a BOJ rate hike appear largely priced in, caution is still advised. Investors should monitor whether gold can swiftly surpass its previous all-time high in the near term.
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