HSBC-Precious Metals Daily Gold rallied in erratic, volatile trading；needs to consolidate-20251212

Gold prices rallied in Asia and London. The rally occurred in the face of twoostensibly bearish developments: a firmer USD and slightly higher yields. Goldcontinued to churn higher following on from sharp gains in the US the previous day.Physical demand out of India also improved. Silver did not rally by anywhere near asmuch gold, however, although ETF buying was strong. Platinum traded up with goldalso, and while palladium rallied, it did so at a lag to both platinum and gold.

Although there were no US economic releases data to speak of, gold surged rightfrom the US opening and climbed higher. The gains were supported by a mix of safehaven and momentum buying. Overall expectations that the Fed rate cutting cyclewould continue also buoyed gold. The aggregate impact of a string of Fed speakershelped to abruptly reverse the rally. Chicago Fed President Goolsbee said hedissented from the 25bp rate cut because he wanted more data before committing toreducing rates. Kansas City Fed President Jeffrey Schmid also dissented from cuttingrates at the FOMC in favor of holding the policy rate steady, while Fed GovernorStephen Miran again argued for a larger 50bp rate cut. Federal President BethHammack said that given her own take on the economy, she would prefer monetarypolicy to be tighter than it is currently. After sliding, gold pared losses. The tech stockslide severely cut into silver, which fell notably. To a lesser degree, platinum alsoretreated with silver, but palladium dropped sharply on liquidation.