Gold is currently trading at $2,038 per ounce, showing positive momentum in response to a weakening US dollar and a significant drop in US bond yields. The 10-year Treasury note yield, which is widely watched, has fallen to 3.9% from over 4.5% just three weeks ago. During this period, the price of gold has risen from $1,980 to $2,040.
The declining US bond yields make investments in precious metals like gold more attractive, leading to increased buying interest in the yellow metal. Furthermore, with the likelihood of a US interest rate cut early next year on the rise, the US dollar may continue to weaken, providing additional support for gold. Analysts are recommending long positions in gold with a target price of $2,060, indicating confidence in the ongoing bullish trend.
GBP/USD: Inflation Eases in the UK
The GBP/USD pair is currently trading near 1.2650. November's consumer price index (CPI) in the UK showed a decline to 3.9% on an annual basis, which was lower than the 4.3% predicted by experts. Additionally, the core CPI dropped to 5.1%. This significant easing of inflationary pressures in the UK may open the door for the Bank of England to shift its monetary policy from tightening to a more dovish stance early next year.
Given the current market sentiment, the British currency may face continued pressure until the release of GDP data. Traders are advised to consider short positions with a target of 1.2500.
AUD/USD: Potential for Growth
The AUD/USD pair is currently trading near 0.6750. Although there have been no major economic developments, currency movements are influenced by external factors. Officials from the Reserve Bank of Australia (RBA) have been focusing on inflation in the services sector, which has shown a slower rate of decline compared to the overall inflation rate.
Furthermore, there are concerns that the blockade of the Red Sea for shipping could lead to an increase in oil prices, subsequently impacting the prices of other goods. Additionally, Australia's population growth, with net migration reaching 500 thousand people this year, may contribute to inflation.
Considering these factors, the AUD/USD pair retains its growth potential, and traders are recommended to explore long positions with a target of 0.6850.
