Copper prices edged higher despite broad concerns over weak demand in top metals consumer China, and as investors continued to keep a close eye on the path of interest rates.
According to analysts, markets continue to price in a 25 basis-point interest rate cut by the Fed as early as March.
“The communication and timing of these cuts will be an important driver for risk assets, the dollar, and our commodity markets next year,” Peak Trading Research said.
Saxo Bank has kept a bullish outlook for gold into 2024 “in the firm belief that rates have peaked, and that Fed funds and real yields will start to trend lower.”
Central banks’ demand for gold is also potentially heading for another record year, with more than 1000 tons being removed from the market for a second year running, Saxo Bank said, adding that this is one of the main reasons the yellow metal has managed to rally despite surging real yields.