**Gold Stabilizes Amid Rising US Treasury Yields** Gold is holding steady at around $4,205 during early Asian trading. This stability comes as US Treasury yields rise and strong employment data is released, which may limit gold’s gains as traders await the US PCE inflation report later today. US Initial Jobless Claims dropped to 191,000 for November 29, down from 218,000 the previous week and below the expected 220,000. This drop could strengthen the US Dollar, influencing gold prices that are based in USD. Traders are eagerly anticipating the US PCE inflation data for hints about the Federal Reserve’s future monetary policy. A 25 basis point rate cut is widely expected at the December meeting, which could benefit gold by lowering its opportunity cost. Geopolitical uncertainties, especially regarding Ukraine peace talks, might make gold more appealing as a safe-haven investment. Central banks, especially from emerging markets, are steadily increasing their gold reserves, achieving record high purchases in 2022. Gold prices typically move in the opposite direction of the US Dollar and fluctuate with interest rates and geopolitical stability. Therefore, changes in the Dollar’s strength significantly affect gold prices. **Anticipation for Fed Rate Decision** Gold remains stable around $4,205 as we await the PCE inflation report later today. Despite strong job data showing initial claims at only 191,000, the market is focused on next week’s Fed meeting, creating some tension for derivative traders heading into the weekend. The market is largely expecting a 25 basis point rate cut from the Federal Reserve next week, with an 85% probability priced in according to the latest CME FedWatch data. Such a dovish move would lower the opportunity cost of holding gold, providing a positive boost for the metal. Today’s PCE data is crucial. Forecasts suggest a slight decline in the core reading to 2.8% year-over-year. If the number comes in higher, we could see a quick drop in gold prices, though it might be brief as it challenges the Fed’s rate-cut narrative. On the other hand, a lower number could spark a strong rally. Recently, there’s been an increase in implied volatility for short-term gold options. This suggests traders are preparing for a significant price movement following the PCE announcement. Strategies that take advantage of this expected volatility, rather than just focusing on price direction, could be wise. It’s important to keep in mind that gold prices have more than doubled since the inflationary pressures in 2023 and 2024. Ongoing geopolitical uncertainty, especially concerning Ukrainian peace talks, signals that any dips from strong economic data could be seen as buying opportunities. Create your live VT Markets account and start trading now.

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