Gold Gleams As Dollar Dims

London: 12 December 2023 (TraderMade): Gold prices climbed on Tuesday, shaking off the dust of a three-week low, as the US dollar retreated. Investors are holding their breath, awaiting the release of crucial US inflation data and significant central bank policy decisions that could swing the pendulum on interest rates.

The XAUUSD pair was at 1984.585 (at 09:05 AM GMT), a 0.13% rise from its previous close. This upward momentum can be attributed to the weakening dollar, which makes gold more affordable for investors holding other currencies.

But the real drama unfolds later today, with the release of the US Consumer Price Index (CPI) report at 01:30 PM GMT. US inflation is expected to remain flat, with core inflation anticipated at 4%, higher than the Fed's target of 2%.

Lower interest rates benefit gold, as it competes less favorably with interest-bearing assets. The Fed will announce interest rate decisions and economic projections on Wednesday. Similarly, the European Central Bank and the Bank of England will hold policy meetings on Thursday, adding to the week's intrigue.

With crucial economic and policy events on the horizon, the coming days promise to be a rollercoaster ride for the precious metals market.