Gold Stabilizes Near $4,340 Amid U.S. Inflation Decline and Rising Geopolitical Risks

Gold prices stabilized near $4,340 per ounce during Thursday's trading, remaining close to record highs set in October, amid U.S. inflation data that enhanced expectations for potential further interest rate cuts by the Federal Reserve.

The latest data revealed that the annual inflation rate in the United States dropped to 2.7% in November, below expectations, while core inflation fell to 2.6%, marking the lowest level since April 2021, which supported gold's appeal as a non-yielding asset in a less restrictive monetary environment.

In addition to monetary factors, geopolitical tensions continued to provide additional support to the precious metal, following U.S. moves to halt sanctioned Venezuelan oil shipments after a tanker seizure and military deployment last week.

The Ukrainian situation also remained on investors' minds, as Russian President Vladimir Putin reaffirmed his regional demands despite intensified U.S. diplomatic efforts for a resolution, keeping hedging demand for gold elevated.

The stability of gold at these levels reflects a mix of expectations for accommodative monetary policy and ongoing geopolitical uncertainty, factors that keep the precious metal supported in the near term, while markets await any new signals from the Fed or developments on the international stage.