Euro eases, dollar perks up in muted holiday trade

The euro dipped against the dollar on Thursday as traders reined in bets of more interest rate cuts by the European Central Bank, while broader currency moves were muted in US holiday-thinned trading.

The Japanese yen slipped to 151.58 per dollar but with its 2.1% gain this week the currency has recovered losses suffered since the US election and was heading for its best weekly showing in three months. Markets see about a 53% chance the Bank of Japan will raise rates next month.

Broad trade was light as US stock and bonds markets were shut for the Thanksgiving holiday.

The dollar index ticked up to 106.21 after dropping to as low as 105.85 in the prior session, a two-week trough.

“It’s likely to be a subdued couple of days to wrap up the week but I expect the dollar should rebound as December gets underway,” said Michael Brown, senior research strategist at Pepperstone, adding that Wednesday’s move that put the dollar back under 106 seemed a bit “detached from fundamentals.”

“We’re still talking about US exceptionalism, an incredibly long laundry list of issues in the eurozone and now we’ve got French budget worries this morning.”

The euro slipped 0.2% to USD 1.054625 after its sharp rise on Wednesday following hawkish remarks from European Central Bank board member Isabel Schnabel

The comments prompted investors to pull back on more aggressive rate cut expectations and buy the common currency which is on track for its worst month in two-and-a-half years.

German annual inflation was flat in November despite expectations of a second consecutive increase. It comes ahead of euro zone inflation data on Friday which could offer hints on the ECB’s next steps.

Money markets now see only a 13% chance of a larger 50 basis points rate cut by the ECB, whereas last Friday it was a toss-up. A 25 bps move is fully priced in.

“Today’s macro data releases in the eurozone should encourage the ECB hawks to object to a 50bp rate cut in December,” said Carsten Brzeski, global head of macro at ING.

Eyes are also on France’s fragile coalition government, which is struggling to pass a budget.

HOLIDAY LULL

Sterling was little changed at USD 1.2666 versus the greenback, while the Swedish crown firmed against the dollar and euro as data showed sentiment among businesses and consumers in Sweden picked up in November.

The Australian dollar recovered from early weakness and gained slightly to USD 0.6501. Reserve Bank of Australia governor Michele Bullock said that core inflation was too high to allow for rate cuts in the near term.

While the currency majors were in a bit of a lull, there was some action in emerging markets.

Russia’s rouble strengthened to just over 110 per dollar after shedding nearly a third of its value since August as the Russian central bank said it would stop forex purchases until the end of the year to support the currency.

Brazil’s real touched a record low on concern over the impact of tax cuts on a stretched budget.

South Korea’s won was a little weaker after the central bank cut rates at a second straight meeting – an outcome only four of 38 economists polled by Reuters had foreseen.

(Reporting by Tom Westbrook and Medha Singh; Editing by Sonali Paul, Kim Coghill and Susan Fenton)

Gold gains on safe-haven demand, US markets closed for Thanksgiving

Gold prices rose on Thursday as geopolitical uncertainty and trade war concerns boosted safe-haven demand, with low trading volumes expected as US markets are closed for the Thanksgiving holiday.

Spot gold was up 0.2% to USD 2,641.79 per ounce at 10:07 a.m. ET (1507 GMT). US gold futures were steady at USD 2,642.00. Bullion posted its deepest one-day decline in more than five months earlier on Monday.

Geopolitical risks remain elevated with the ongoing war in Russia-Ukraine, and while an Israel-Hezbollah ceasefire is in force, Israel’s contingencies for retaliation keep tensions alive, said Aneeka Gupta, director of macroeconomic research at WisdomTree.

US President-elect Donald Trump’s pledge to hit Canada and Mexico with tariffs was also having an effect, she added. “It did increase a bit of concern on the possible repercussions from these two countries. So that continues to remain an important support factor for gold.”

However, Trump’s tariff plans are also seen as potential drivers of inflation, which could prompt the US Federal Reserve to slow its interest rate cutting, potentially limiting any further rally in non-yielding bullion.

Data on Wednesday showed progress in lowering US inflation appears to have stalled in the past months, suggesting the Fed may proceed cautiously with further rate cuts.

Markets now see a 70% chance of a quarter-point rate cut in December. Gold tends to do well in a lower interest rate environment.

Following a Republican clean sweep in the Nov. 5 US election, bullion saw a sharp sell-off.

“After that sell-off … there has been some revived investor interest that has given some support, while weaker-handed holders were flushed out,” said StoneX analyst Rhona O’Connell.

“The market now is a bit more careful and prices probably will be range-bound with more downward bias going into the year-end,” said Brian Lan, managing director at Singapore-based dealer GoldSilver Central.

Spot silver rose 0.5% to USD 30.22 per ounce, platinum was up 0.9% to USD 935.25 and palladium gained 0.6% to USD 978.12.

(Reporting by Rahul Paswan and Sherin Elizabeth Varghese in Bengaluru. Editing by Jason Neely, Mark Potter, and David Evans)

China stocks drop on heightened trade tensions, automakers’ price war

HONG KONG – China and Hong Kong stocks fell on Thursday, as investors feared an escalation of the trade war with the US and a further ban on chip sales to China, while a price war between automakers in the country looked set to intensify.

**The blue-chip CSI 300 index closed down 0.88%, while the Shanghai Composite index slid 0.43% at 3,295.70.

** Most sectors closed lower as investors were largely in a wait-and-see mode for clarity on US President-elect Donald Trump’s trade policies and its potential consequences.

** Auto stocks were the biggest decliners, falling by more than 2%, after media reports said that BYD and other automakers pushed suppliers to cut prices, signaling that a brutal price war in the world’s largest auto market is set to escalate.

** BYD’s Hong Kong and mainland shares fell 2.6% and 2.3% respectively, while SAIC Motor Corp declined by 2.8%.

** In Hong Kong, the Hang Seng Index was down 236.17 points or 1.2% at 19,366.96. The Hang Seng China Enterprises index fell 1.46%, while the Hang Seng Tech lost 1.52%.

** China’s state media warned Trump his pledge to slap additional tariffs on Chinese goods could drag the world’s top two economies into a mutually destructive tariff war.

** “A key risk for China’s economy and markets in 2025 comes from Trump’s policies-the proposed tariffs of 60% could reduce GDP growth by up to 2% over the next four to six quarters,” Michelle Qi, head of China equities at Eastspring Investments, said in a note.

** Sentiment was further dented after Bloomberg News reported that the Biden administration could announce additional curbs on sales of semiconductor equipment and artificial intelligence memory chips to China as soon as next week.

** That also weighed on the broader consumer stocks listed both onshore and offshore.

** The smaller Shenzhen index ended down 0.65% and the start-up board ChiNext Composite index was weaker by 1.77%.

** Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.52%, while Japan’s Nikkei index closed up 0.56%.

(Reporting by Summer Zhen; Editing by Abinaya Vijayaraghavan and Varun H K)

Oil steady after surprise rise in US gasoline stocks

Oil prices were little changed on Wednesday, pressured by a large surprise build in US gasoline stocks and worries about US interest rate cuts next year, but prices drew support from concerns about supply eased after a ceasefire deal between Israel and Hezbollah.

Brent crude futures settled 2 cents higher at USD 72.83 a barrel. US West Texas Intermediate crude slipped 5 cents to USD 68.72.

US gasoline stocks rose by 3.3 million barrels in the week to 212.2 million barrels, the Energy Information Administration said, counter to analysts’ expectations in a Reuters poll for a draw of 46,000 barrels.

Crude stocks fell by 1.8 million barrels in the week ended Nov. 22, the EIA added, far exceeding analysts’ expectations in a Reuters poll for a draw of 605,000 barrels.

Market sources, citing the American Petroleum Institute, had said on Tuesday that oil inventories fell by 5.94 million barrels and fuel inventories rose last week.

“It is surprising to see gasoline inventories building so much and implied demand not really budging week-on-week, given expected record travel this Thanksgiving,” said Matt Smith, an analyst at Kpler.

Oil prices also were dented by US data showing progress on lowering inflation appears to have stalled in recent months, which could narrow the scope for the Federal Reserve to cut interest rates in 2025.

Traders added to bets the US central bank will lower borrowing costs by 25 basis points at its Dec. 17-18 meeting, according to CME Group’s FedWatch tool. However, they anticipate the Fed will leave rates unchanged at its meetings in January and March.

Slower-than-expected rate cuts would keep the cost of borrowing elevated, which could slow economic activity and dampen demand for oil.

Both oil benchmarks settled lower on Tuesday after Israel agreed to a ceasefire deal with Lebanon’s Hezbollah group, effective Wednesday after both sides accepted the agreement brokered by the US and France. The ceasefire started on Wednesday.

“The real question will be for how long it (the ceasefire) will truly be honored,” said Dennis Kissler, senior vice president of trading at BOK Financial.

Oil gained support after sources from the OPEC+ group, which includes the Organization of the Petroleum Exporting Countries and allies led by Russia, said it is discussing a further delay to the oil output increase set for January.

The group, which produces about half of the world’s oil, had aimed to gradually ease production cuts through 2024 and 2025, but weaker global demand and rising output outside OPEC+ have cast doubt on that plan. The decision will be made at a Dec. 1 meeting.

The heads of commodities research at Goldman Sachs and Morgan Stanley said oil prices are undervalued, citing a market deficit and risk to Iranian supply from possible sanctions when US President-elect Donald Trump takes office.

Sources also told Reuters on Tuesday that crude oil would not be exempt from the 25% tariffs that Trump has threatened to impose on all products coming into the US from Mexico and Canada.

Oil industry analysts and traders warned the move would likely raise oil prices for US refiners, squeezing margins and driving up the cost of fuel.

(Reporting by Arunima Kumar in Bengaluru, Yuka Obayashi in Tokyo and Emily Chow in Singapore; editing by David Goodman, Jason Neely, Jonathan Oatis, David Gregorio and Paul Simao)

Investors cling to crash protection despite sizzling US stock market rally

NEW YORK – Demand for options protection against an equity market crash is rising, even as a post-election rally takes US stocks to record highs.

Worries over the possibility of a contested election dissipated following President-elect Donald Trump’s victory earlier this month, helping the S&P 500 climb to an all-time high. The Cboe Volatility Index, one measure of investor anxiety, closed near a post-election low of 14.10 on Tuesday.

But several barometers gauging uptake for protection against extreme market swings – such as the Nations TailDex Index and Cboe Skew – are picking up. While the rise in these indexes does not necessarily mean investors expect catastrophic events, they suggest elevated caution in the face of several weighty risks, including the potential of an inflationary snap-back to ructions in global trade next year.

One such risk came to the fore late on Monday, when Trump pledged big tariffs on Canada, Mexico and China – detailing how he will implement campaign promises that could trigger trade wars.

Though US stocks largely shrugged off the comments, Trump’s broadside evoked flashbacks to the trade-fueled market swings that took place during his first term, bolstering the case for portfolio hedging.

Amy Wu Silverman, RBC Capital Markets head of derivatives strategy, said investors are guarding against so-called fat tail risks, options parlance for higher expected probabilities of extreme market moves.

“While investors broadly remain long equities, the tails are fatter,” she said. “This is partly from a rise in geopolitical risk premium and certainly potential policy risk as Trump returns to the presidency and potentially enacts tariffs and other measures.”

The Nations TailDex Index, an options-based index that measures the cost of hedging against an outsized move in the SPDR S&P 500 ETF Trust, has risen to 13.64, double its post-election low of 6.68. The index is higher now than it has been about 70% of the time over the past year.

Cboe Skew index, another index that indicates the market’s perception of the likelihood of extreme price movements, on Monday closed at a two-month high of 167.28.

VIX call options, which offer protection against a market sell-off, also shows some of this demand to protect against “tail risks.” VIX three-month call skew – a barometer of the strength of demand for these contracts – is hovering near the highest level in over five years, according to an analysis by Susquehanna Financial Group.

“The general idea is there is an 80-95% chance of pretty low volatility, that’s why the VIX is relatively low, but there’s just more of a tail event being factored in,” said Chris Murphy, co-head of derivative strategy at Susquehanna.

Maxwell Grinacoff, equity derivatives strategist at UBS, said Monday’s tariff pledge by Trump is the kind of risk investors might be worried about encountering again in coming months.

“It gives people a reason again to start hedging,” he said “You’ve seen more of a return to downside hedging again.”

Investors are also grappling with uncertainty over how deeply the Federal Reserve will be able to cut interest rates in coming months, as central bankers are faced with a stronger-than-expected economy that could spur an inflationary rebound if they ease monetary policy too far. The Fed will hold its last monetary policy meeting of the year on Dec. 17-18.

The Russia-Ukraine war and conflict between Israel and Hamas could also add to market flare-ups.

UBS’s Grinacoff said next year may hold parallels to 2018, when stocks hit new highs at the start of the year only to slide as headlines on trade and tariffs hurt growth expectations and volatility picked up across asset classes.

Investor demand for protection is “warranted, in my opinion,” he said.

(Reporting by Saqib Iqbal Ahmed; Editing by Ira Iosebashvili and Matthew Lewis)

Gold trims gains on US inflation data, finds support in softer dollar

Gold rose on Wednesday, rebounding from an over one-week low hit in the previous session, on a weaker dollar, but trimmed earlier gains after data showed stalled inflation progress, hinting that the US Federal Reserve might be cautious on further rate cuts.

Spot gold was up 0.3% at USD 2,638.90 per ounce, as of 01:41 p.m. ET (1841 GMT). US gold futures GCv1 settled 0.7% higher at USD 2,639.90.

US markets to be closed on Thursday in observance of the Thanksgiving holiday.

US consumer spending increased solidly in October, but progress lowering inflation appears to have stalled in the past months.

“We think that the small correction that we just saw in the metals in reaction to data was mostly driven by personal income going up,” Phillip Streible, chief market strategist at Blue Line Futures, said.

“If the consumer is stronger, even in the face of higher inflation, it shows the resiliency behind it, and that the Federal Reserve may be more reluctant to aggressively keep cutting rates.”

The dollar index slipped 0.8%, hitting a two-week low, boosting gold’s appeal for holders of other currencies. USD/

Gold could reach USD 3,000 into the first two quarters of 2025, barring a sharp inflation spike that forces the Fed to raise rates, which could hurt the bull market, Streible said.

Markets now see a 70% chance of a quarter-point rate cut in December. The non-yielding bullion tends to shine in a lower-interest-rate environment.

Before the release of the PCE figures, bullion climbed up to 1%. The rebound followed a dramatic USD 100 plunge on Monday, marking gold’s sharpest one-day drop in over five months, as safe-haven demand waned following the announcement of a long-negotiated ceasefire between Israel and Lebanon’s Iran-backed Hezbollah.

Prices fell to their lowest level since Nov. 18 in the previous session.

“Taking a step back from today’s price movements, greater volatility could be in store for gold prices in the near term ahead of Donald Trump‘s inauguration and as the situation in the Middle East develops,” said Hamad Hussain, assistant climate and commodities economist at Capital Economics.

Spot silver rose 1.1% to USD 30.09 per ounce, platinum added 0.1% to USD 928.17, palladium fell 0.4% to USD 973.76.

(Reporting by Sherin Elizabeth Varghese and Anushree Mukherjee in Bengaluru; Editing by Alexandra Hudson, Shilpi Majumdar and Mohammed Safi Shamsi)

Oil settles down after Israel agrees to ceasefire deal with Hezbollah

HOUSTON – Oil prices settled lower on Tuesday, extending the previous day’s losses in choppy trade after Israel agreed to a ceasefire deal with Hezbollah, reducing oil’s risk premium.

Brent crude futures settled down 20 cents, or 0.27%, to USD 72.81 a barrel. US West Texas Intermediate crude futures settled at USD 68.77 a barrel, down 17 cents, or 0.25%.

The accord between Israel and armed group Hezbollah was expected to take effect on Wednesday, US President Joe Biden said.

Israeli Prime Minister Benjamin Netanyahu said he was ready to implement a ceasefire and would “respond forcefully to any violation” by Hezbollah.

On Monday, oil prices fell more than USD 2 following multiple reports that the warring sides had agreed to terms of a ceasefire.

A ceasefire could pressure crude oil prices because the US administration would likely reduce sanctions on oil from Iran, a supporter of Hezbollah, StoneX analyst Alex Hodes said in a note.

OPEC+ EYE OUTPUT HIKE DELAY

Both benchmarks briefly jumped more than USD 1 per barrel during the session.

“We popped and dropped around the time news came out of the resumption of OPEC talks,” said Phil Flynn, senior analyst at Price Futures Group.

OPEC+ nations are discussing a further delay to a planned oil-output hike that was due to start in January, two sources from the producer group said, ahead of Sunday’s meeting to decide policy for early 2025.

The group pumps about half the world’s oil, and had planned to gradually roll back oil-production cuts with small increases over many months in 2024 and 2025. But a slowdown in Chinese and global demand, and rising output outside the group, have put a dampener on that plan.

“There were embers in the fire this morning with OPEC+ looking to defer production increases again and the Trump tariffs, but those were not enough to move the needle to support prices anywhere above USD 70 a barrel for WTI,” said Again Capital partner John Kilduff.

TRUMP TARIFFS TO INCLUDE CRUDE OIL, SOURCES

US President-elect Donald Trump said he would impose a 25% tariff on all products coming into the US from Mexico and Canada.

Crude oil would not be exempt from the trade penalties, two sources familiar with the plan told Reuters on Tuesday.

Maintaining the flow of energy products across the US borders with Mexico and Canada is critical, the top US oil and gas lobbying group, American Petroleum Institute, said.

The vast majority of Canada’s 4 million barrels per day of crude exports go to the US. Analysts have said it is unlikely Trump will impose tariffs on Canadian oil, which cannot be easily replaced since it differs from the grades that the US produces.

Meanwhile, US crude oil stocks fell while fuel inventories rose last week, market sources said, citing API figures on Tuesday.

Crude stocks fell by 5.94 million barrels in the week ended Nov. 22, the sources said on condition of anonymity. Gasoline inventories rose by 1.81 million barrels and distillate stocks climbed by 2.54 million barrels, they said.

(Reporting by Georgina McCartney in Houston, Paul Carsten and Enes Tunagur in London, Gabrielle Ng in Singapore; Editing by Jan Harvey, Susan Fenton, David Gregorio, Jonathan Oatis, Deepa Babington and Rod Nickel)

Wall Street stocks end higher on tech; markets analyze Trump’s tariff threats, Fed minutes

The benchmark S&P 500 and the Nasdaq ended higher on Tuesday, as technology stocks rebounded, while investors digested President-elect Donald Trump’s tariff pledges on top trade partners and the latest minutes from the Federal Reserve.

US short-term interest-rate futures pared earlier losses after the Fed’s latest minutes showed officials appeared divided over how much further they may need to cut interest rates.

The minutes of the Nov. 6-7 meeting also showed that the group agreed that this was a moment to avoid giving much concrete guidance about how US monetary policy is likely to evolve in the weeks ahead.

“The minutes did nothing to alter my view that the policy rate is going to be adjusted lower next week and will continue to do so through the next calendar year,” said Jamie Cox, managing partner for Harris Financial Group.

Other analysts were more cautious.

Paul Ashworth, chief North America economist for Capital Economics, noted that he still expects another 25 basis-point cut, but cautioned such decisions are data-dependent and therefore November’s employment and inflation data will be pivotal

In a development overnight, Trump said he would impose a 25% conditional tariff on Canadian and Mexican imports that could violate a free-trade deal he negotiated during his previous term. He also outlined “an additional 10% tariff, above any additional tariffs” on imports from China, raising the risk of trade wars.

Automakers Ford and General Motors both dropped on the news as they have highly integrated supply chains across Mexico, the US, and Canada.

“The concern is that some products are going to become more costly and that will mean revenue for those companies that are possibly manufacturing those goods overseas is going to decline,” said Robert Pavlik, senior portfolio manager at Dakota Wealth.

“It’s a lot of back-and-forth right now because investors are trying to position themselves for January and the days after and they’re not really sure.”

The Dow Jones Industrial Average rose 123.74 points, or 0.28%, to 44,860.31, the S&P 500 gained 34.23 points, or 0.57%, to 6,021.60 and the Nasdaq Composite gained 119.46 points, or 0.63%, to 19,174.30.

Gains in megacaps such as Microsoft and Apple boosted the information technology sector and the tech-heavy Nasdaq.

Wells Fargo stood out among sluggish banking stocks, gaining after Reuters reported, citing sources, that the bank is in the last stages of a process to pass regulatory tests to lift a USD 1.95 trillion asset cap next year after fixing problems from its scandal over fake accounts.

The blue-chip Dow was weighed down by declines in Amgen, which slid after its experimental obesity drug fell short of expectations.

The S&P 500 touched a record high on Monday and logged its sixth-straight session of gains, while the Russell 2000 also scaled an all-time high after three years. On the day, the small-cap index fell.

Among others, Eli Lilly rose after US President Joe Biden proposed expanding Medicare and Medicaid coverage for anti-obesity drugs.

Best Buy slumped and was among the top decliners on the S&P 500 after trimming its annual profit and sales forecasts.

(Reporting by Saeed Azhar in Toronto; Johann M Cherian and Purvi Agarwal in Bengaluru; Editing by Maju Samuel and Matthew Lewis)

US bond rally loses steam after Trump’s tariffs pledge

NEW YORK – US Treasury long-term yields rose on Tuesday, as a sharp bond rally lost momentum and investors assessed US President-elect Donald Trump’s tariff pledges.

Trump said on Monday he would impose tariffs on products from Canada, Mexico and China, sparking volatility as investors braced for trade disputes. The announcement came after a sharp rally in bonds triggered by Trump’s pick of hedge fund manager Scott Bessent as US Treasury Secretary.

The backup in yields reflected the risk of rising inflation under higher tariffs, some investors said. It was also an indication that technical factors that contributed to the earlier rally had lost some steam, said Subadra Rajappa, head US rates strategy at Société Générale.

Investors digested a handful of economic data on Tuesday indicating the economy remained on solid footing. This included Federal Housing Finance Agency data showing US single-family house prices increased solidly in September, as well as the November reading of Consumer Confidence released by the Conference Board, which was in line with expectations.

Minutes of the Nov. 6-7 Federal Open Market Committee meeting, which were released on Tuesday, showed Federal Reserve officials appeared divided at their meeting over how much farther they may need to cut interest rates, though many said it was appropriate to reduce policy restraint gradually.

Short-term Treasury yields declined after the release, while rates futures traders marginally increased their bets on a 25 basis point cut at the Fed’s rate-setting meeting next month. A December cut had a 60% probability later on Tuesday, up from 56% earlier in the day, CME Group data showed.

“Concern about the tariffs and concern about the US deficit are what’s weighing on the market for the ability of the Fed to really cut,” said Matt Eagan, portfolio manager and head of the Full Discretion Team at Loomis, Sayles & Company.

At the same time, he said the market reaction to the potential inflationary impact of tariffs was relatively muted, as many interpreted Trump’s pledges as a negotiating tactic.

“There’s a lot of optimism that this is all just negotiations … Treasuries are more or less getting the joke,” he said.

On the supply side, the Treasury sold USD 70 billion in five-year notes on Tuesday, following a USD 69 billion two-year note auction on Monday that was well received by investors.

Tuesday’s auction was also met with solid demand. The notes were sold with a high yield of 4.197%, nearly two basis points below the market rate at the bidding deadline, in a sign investors were willing to pay up to absorb the issuance.

Benchmark 10-year yields were last seen at 4.306%, up from 4.263% on Monday.

Two-year yields, which tend to more closely reflect monetary policy expectations, were last at 4.254%, slightly lower than on Monday. Further out, 30-year yields were at 4.481%, up from 4.447% on Monday.

The closely watched yield curve comparing two- and 10-year Treasury yields steepened on Tuesday and was last at 4.6 basis points. It had inverted marginally on Monday, with short-term bonds yielding more than longer-dated ones.

(Reporting by Davide Barbuscia, Editing by Nick Zieminski)

Gold steady as safe-haven demand faces mixed geopolitical signals

Gold prices were caught in a tug-of-war on Tuesday, dipping to a week’s low as safe-haven demand softened as Israel agreed to a ceasefire deal with Lebanon, while concern over Ukraine and US President-elect Donald Trump’s tariff plans limited declines.

Spot gold was steady at USD 2,626.83 per ounce as of 02:07 p.m. ET (1906 GMT), erasing some of the earlier losses when prices hit their lowest since Nov. 18. US gold futures settled 0.1% higher at USD 2,621.30.

This follows Monday’s dramatic USD 100 plunge, when gold retreated from a three-week high. The sell-off was fueled by Israel and Hezbollah ceasefire optimism and further pressured by Trump’s nomination of Scott Bessent as Treasury Secretary, which tempered demand for gold as a safe haven.

Israel’s security cabinet has agreed a ceasefire deal with Lebanon, Channel 12 reported on Tuesday.

“It’s probably some realization that a ceasefire between Israel and Hezbollah only modestly mitigates overall geopolitical risks, certainly there’s some optimism there,” said Peter Grant, vice president and senior metals strategist at Zaner Metals.

Concern over the wider fallout from Russia’s invasion of Ukraine continues to remain very high, however, Grant said adding that gold will likely experience choppy consolidation in the near term, ranging between USD 2,575-USD 2,750.

Gold is traditionally seen as a safe investment during economic and geopolitical uncertainty such as trade wars.

Trump’s pledge of big tariffs on Canada, Mexico, and China looms large. While they could spark trade wars and bolster gold’s appeal, the resulting inflation risks might tamper Federal Reserve rate cuts, potentially weighing on prices, analysts said.

Markets are now focused on Fed November meeting minutes later in the day. With a 56% chance of a December rate cut being priced in, investors remain cautious.

Minutes of the Federal Reserve’s Nov. 6-7 meeting showed, officials expressed differing views on potential future rate cuts. However, they collectively decided to withhold specific guidance on the likely direction of US monetary policy.

Some participants suggested a pause in rate easing if inflation stays high, while others proposed accelerated cuts if the labor market or economic activity weakens.

Spot silver rose 0.4% to USD 30.40 per ounce and palladium gained 1% to USD 982.87.

Platinum lost 1.3% to USD 926.35, with Commerzbank analysts forecasting
platinum prices to hit USD 1,100 in 2025.

(Reporting by Sherin Elizabeth Varghese and Anmol Choubey in Bengaluru; editing by Philippa Fletcher, Shreya Biswas, and Mohammed Safi Shamsi)

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