Gold prices scaled a two-week peak on Wednesday, supported by escalating geopolitical tensions and expectations of another rate cut by the U.S. Federal Reserve next week, and ahead of the closely watched U.S. inflation report later in the day.
Spot gold was up 0.2% at $2,698.47 per ounce, as of 0253 GMT, and hit its highest since Nov. 25.
U.S. gold futures rose 0.6% to $2,734.70.
Investors’ focus is on the U.S. Consumer Price Index (CPI), which is expected to have risen by 0.3% in November. The data could help set expectations for the Fed’s 2025 policy.
“An expected (CPI) number pretty much gives the Fed green light to cut (interest rates) next week and that might be the catalyst we need to see for gold,” said Kyle Rodda, financial market analyst at Capital.com.
The Fed is likely to cut rates by 25 basis points on Dec. 18, according to 90% of economists polled by Reuters, with most expecting a pause in late January amid concerns over inflationary risks.
On the geopolitical front, the Israeli military said it struck most of the strategic weapons stockpiles in Syria and hit two Syrian navy facilities, while the South Korean police raided the presidential office over martial law, Yonhap news agency reported.
Gold is considered a safe investment during economic and geopolitical turmoils and tends to thrive in a low-interest-rate environment.
Central bank buying, monetary policy easing and geopolitical tensions have propelled bullion to multiple record highs this year, putting it on track for its best year since 2010, with a nearly 31% increase so far.
Goldman Sachs on Tuesday reiterated its bullish stance on prices and pushed back on the argument that bullion cannot rally to $3,000 per ounce by end-2025 in a world where the dollar stays stronger.
Spot silver added 0.1% to $31.93 per ounce, platinum gained 0.5% to $947.55 and palladium rose 0.7% to $975.19.