Gold has posted small gains in the Thursday session. In North American trade, the spot price for one ounce of gold is $1227.51, up 0.12% on the day. Markets and banks in the U.S. are closed for the Thanksgiving holiday and there are no U.S events on the schedule.
Gold has enjoyed an uneventful week, but the same cannot be said about the stock markets, which have endured a tumultuous week. The sharp drop in the equity markets has unnerved investors, who remain jittery even though stock markets have recovered slightly after a meltdown on Tuesday. If the equity markets continue to show turbulence, gold could take advantage as investors eye safe-haven assets such as gold.
The turmoil in the stock markets has raised questions about the Federal Reserve’s monetary policy. The markets had expected the Fed to raise rates up to four times in 2019, but with signs that the U.S. economy could slow in 2019, policymakers may ease up on the pace of rate hikes. The Federal Reserve remains on track to gradually raise rates in 2019, but the pace could be slower than anticipated just a few weeks ago. There’s no denying that the U.S economy is currently in great shape, with unemployment at historically low levels and the $1.5 trillion tax cut package boosting economic growth. However, the rosy picture could change next year. The U.S-China trade war is expected to take a bite out of U.S growth, and the stimulus from the tax cut will fade over time. Economic growth has been slowing, with third-quarter growth expected at 2.7%, down from 3.5% in the second quarter. A rate increase in December remains a strong possibility, with the odds of a rate hike standing at 76%.
