On Thursday (December 12th) morning trading in the Asian market, gold prices fluctuated at a high level, and spot gold is currently trading around $2719.22 per ounce. Gold prices rose more than $20 on Wednesday, marking the fourth consecutive trading day of gains. The intraday high reached $2720.98 per ounce, only slightly lower than the one month high of $2721.21 per ounce set on November 25th; The previously released inflation data met expectations, increasing the possibility of the Federal Reserve cutting interest rates next week, while investors are waiting for the US Producer Price Index (PPI) data to provide further direction for monetary policy.

According to data from the US Department of Labor, consumer prices in the US increased by 0.3% month on month in November, 2.7% year-on-year, and 2.6% in October. Economists surveyed by Reuters previously predicted that CPI would rise by 0.3% month on month and 2.7% year-on-year.

David Meger, head of metal trading at High Ridge Futures, said: 'The premise for gold to rise is that CPI data is moderate and certainly meets expectations, and inflation rates will not rise further but remain stable, which will almost certainly lead to the Federal Reserve cutting interest rates at the next FOMC meeting.'. "

CME's FedWatch tool shows that traders predict a 98% likelihood of the Federal Reserve further cutting interest rates by 25 basis points at its meeting on December 17-18, compared to approximately 86% prior to the release of the inflation report.

In fact, the market is still confident that the Federal Reserve will cut interest rates next week, "said Marc Chandler, Chief Market Strategist at Bannockburn Forex." The Federal Reserve rarely goes against the market with such strong pricing

Eric Winograd, head of developed market economics research at AllianceBernstein, said: 'CPI is basically in line with expectations.'. I don't think this will change the Federal Reserve's thinking, so I expect them to still cut interest rates next week. "

Anne Wealth Management Chief Economist Brian Jacobsen said, "With the release of the employment and inflation reports, nothing can stop the Federal Reserve from cutting interest rates by 25 basis points next week

The Bank of Canada lowered its key policy rate by 50 basis points to 3.25% on Wednesday, which also lowered the opportunity cost of holding gold. Due to the approaching target inflation and sluggish economy in the Eurozone, the European Central Bank is almost certain to cut interest rates again on Thursday and hinted at further policy easing in 2025. The prospect of global central bank interest rate cuts leans towards continuing to support gold prices.

Now all eyes are focused on the PPI data released on Thursday to further clarify the path of the Federal Reserve's interest rate cuts.

We believe that by the end of 2025, gold prices may reach $3000 per ounce, "said Nitesh Shah, commodity strategist at WisdomTree

It is worth mentioning that the turbulent geopolitical situation is also one of the reasons why gold prices have continued to rise this week.

The Israeli Defense Forces announced that in recent days, they have seized multiple Syrian tanks during operations in the buffer zone in southern Syria, which have not been put into use recently. In addition, the troops also found and seized a batch of weapons, including landmines, explosives, anti tank missiles, and other military equipment, at a former Syrian government military outpost.

The Israeli military stated that its four brigade level combat teams are currently continuing their activities within Syria and in the buffer zone between the two countries. In addition, paratroopers and assault teams are also conducting defensive operations and eliminating threats in the buffer zone.

The Russian Ministry of Foreign Affairs stated on Wednesday that Moscow is not prepared to make concessions on the Ukrainian issue. Investors need to pay attention to further news on the geopolitical situation.

It should be noted that the US dollar index and US Treasury yields remain relatively strong, which may suppress the rise in gold prices. The US dollar index rose 0.23% on Wednesday, closing at 106.25, marking the fourth consecutive trading day of gains; The 10-year US Treasury yield rose 1.23% on Wednesday, marking three consecutive trading days of gains and closing at 4.273%, a new high in nearly a week.

In addition to the US PPI data, this trading day will also see changes in the number of initial jobless claims in the US, which investors need to pay attention to. In addition, it is necessary to pay attention to Trump related dynamic news and geopolitical acceleration related news.