Gold eases on profit-taking after breaching one-month high

Gold prices hit new high since November 6

Current conditions remain positive for gold – analysts

US PPI data will be released at 1330 GMT

The market expects a 98% chance that the Fed will cut interest rates by 25 basis points next week

(Graphics added, updated mid-term trading)

Dec 11 (Reuters) – Gold prices fell on Thursday as expectations grew for the Federal Reserve to cut interest rates next week, hitting a more than one-month high as investors took profits.

Spot gold fell 0.3% to $2,711.00 an ounce as of 0455 GMT. Earlier in the session, gold hit its highest level since Nov. 6 at $2,725.79.

U.S. gold futures fell 0.4% to $2,746.80.

“It’s just profit-taking as we’ve seen a good rally in gold this week on a variety of factors, including geopolitical tensions, China resuming gold buying and yesterday’s inflation data being in line with expectations,” director Ajay Kedia said. Kedia Commodities, Mumbai.

“Overall, I think the current situation remains supportive for gold.”

Traders now see a 98.5% chance of a 25 basis point rate cut by the Fed on Dec. 18, according to CME’s FedWatch tool, compared with about 86% chance ahead of the release of the U.S. inflation report.

U.S. consumer prices rose by the most in seven months in November, but that is unlikely to prevent the Federal Reserve from cutting interest rates for a third time next week amid a cooling labor market.

The focus now will be on US Producer Price Index data due at 1330 GMT to provide insight into the Fed’s 2025 policy.

Meanwhile, the European Central Bank is almost certain to cut interest rates again on Thursday and signal further easing in 2025.

Zero-yielding gold is seen as a safe investment during economic and geopolitical turmoil and thrives in low interest rate environments.

Elsewhere, the United Nations General Assembly voted overwhelmingly on Wednesday to call for an immediate, unconditional and permanent ceasefire between Israel and Palestinian militants Hamas in the Gaza Strip.

Spot silver rose 0.3% to $32.02 an ounce, platinum rose 0.4% to $943.75 an ounce and palladium rose 0.8% to $989.20 an ounce.

(Reporting by Rahul Paswan; Editing by Shirley Jacob Phillips and Sumana Nandy)