On the afternoon of November 30, gold prices fluctuate within a narrow range near the highest level in nearly seven months in Asia. Investors are awaiting the Personal Consumption Expenditures (PCE) index to see if the U.S. Federal Reserve (Fed) will lower interest rates sooner than expected.
Today, the spot gold price remains stable at $2,044.30 per ounce, with a fluctuation range of about $6. Meanwhile, December gold futures fell 0.1% to $2,045.40 per ounce.
Market analyst Yeap Jun Rong of IG suggests that gold prices are “in a defensive stance” in today’s session, ahead of the release of the PCE data on the same day. According to him, the positive third-quarter Gross Domestic Product (GDP) figures in the U.S. cannot dispel market speculations about the possibility of the Fed lowering interest rates, as investors still follow cues from recent comments by Fed officials.
This week, Fed officials hinted at the possibility of lowering interest rates in the coming months, predicting a slowdown in growth and continued easing of inflation. These comments led to a decline in the yield of the U.S. 10-year government bond to the lowest level in two and a half months at 4.2470%.
In this session, the U.S. Dollar Index, measuring the strength of the “greenback” against a basket of key currencies, dropped to its lowest level in nearly three months, set to end November with the sharpest decline in a year. This development has made gold cheaper for buyers holding other currencies.
The oil market awaits the OPEC+ meeting
Oil prices showed little movement on the afternoon of November 30 in Asia as investors remained cautious ahead of the expected production cut by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+.
At that time, Brent crude oil prices rose by 13 cents, or 0.2%, to $83.23 per barrel, while West Texas Intermediate (WTI) crude oil prices increased by 17 cents, or 0.2%, to $78.03 per barrel.
The OPEC+ meeting is scheduled for November 30. Insider sources indicate that pre-meeting negotiations are focused on further production cuts, although no specific consensus has been reached.
Additionally, the oil prices in this session are influenced by data showing that China’s manufacturing activity has decreased for the second consecutive month in November, with a more significant decline than expected. The Purchasing Managers’ Index (PMI) in the manufacturing sector dropped from 49.5 in October to 49.4 in November, below the 50-point threshold indicating contraction.
With this data, China may need more policy support to stimulate economic growth in the world’s largest oil-importing country.
Meanwhile, the U.S. Energy Information Administration (EIA) recently reported that U.S. crude oil and refined fuel inventories unexpectedly increased in the previous week, indicating weak demand. Gasoline inventories also rose more than predicted.
Asian stock markets gained points in the afternoon of November 30, as the focus shifted to the upcoming release of U.S. PCE data amid speculation about the Fed’s potential interest rate cut next year.
Closing this session, the Nikkei 225 index in Tokyo rose by 0.5% to 33,486.89 points. In China, both the Shanghai Composite and Hang Seng indices added 0.3% to 3,029.67 points and 17,042.88 points, respectively.
The upward trend was also observed in the Sydney, Seoul, Wellington, Jakarta, and Taipei markets, while the Singapore, Manila, Mumbai, and Bangkok markets experienced declines.
The market is awaiting the PCE data, the Fed’s preferred interest rate measure, with many predictions suggesting a decrease in this index.
Financial expert Jeffrey Roach of LPL Financial believes that inflation is trending downward, consumers are still spending but at a slower pace, and the Fed may end the interest rate hike cycle without significantly impacting the economy. Traders are currently predicting that the Fed will lower interest rates in the first half of next year.
Cleveland Fed branch President Loretta Mester supports halting the third interest rate hike at the December meeting, while Atlanta Fed branch President Raphael Bostic believes that inflation is decreasing.
Earlier this week, other Fed officials made similar comments. However, Richmond Fed branch President Thomas Barkin warned of the need to consider another interest rate hike if inflation rises again.
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