Gold Rises Amid Bets on US Interest Rate Cuts

Gold prices rose on Tuesday during weak trading due to the Christmas holiday, amid a decline in the dollar and bond yields influenced by growing expectations of a cut in interest rates by the Federal Reserve in March. Spot gold increased by 0.5% to $2,063.78 per ounce by 04:01 GMT, after reaching a two-week high of $2,070.39 in the previous session. US gold futures rose by 0.3% to $2,074.90 per ounce. A decrease in interest rates would reduce the opportunity cost of holding non-yielding bullion. Traders now expect an 89% chance of a rate cut by the Federal Reserve in March, according to the CME FedWatch Tool. The dollar index fell by 0.1%, making gold more attractive to holders of other currencies, while the yield on ten-year US Treasury bonds decreased to 3.8838%. The US military launched precise retaliatory airstrikes in Iraq following a drone attack on Monday carried out by Iranian-aligned militants, which resulted in injuries to three American soldiers. Gold is viewed as a safe-haven asset during times of geopolitical uncertainty. Markets in Australia, New Zealand, Hong Kong, and the Eurozone are closed on Tuesday for the Christmas holiday. In other precious metals, silver rose by 0.8% to $24.37 per ounce, platinum increased by 0.2% to $972.85, and palladium rose by 0.6% to $1,209.74.