Spot Gold was holding recent gains on Thursday, while trading in proximity to a fresh five-week high, after the latest US inflation data reinforced the case for a December rate cut by the Federal Reserve.

Data showed yesterday that US annual CPI inflation had accelerated to 2.7% in November from 2.6% in October, in line with market consensus.

And, annual core consumer price inflation remained steady at a three-month high of 3.3% in November.

Markets are now pricing in about a 98% chance of a 25 basis point rate cut at the Federal Reserve’s policy meeting next week, up from an 85% chance a day ago.

The yellow metal found additional support from monetary easing measures by other major central banks, including the Bank of Canada, which slashed borrowing costs by 50 basis points for a second consecutive meeting in December.

The Swiss National Bank and the European Central Bank are also expected to continue easing their monetary policies later today.

Lower interest rates reduce the opportunity cost of holding Gold, which pays no interest.

Spot Gold was last inching down 0.04% to trade at $2,717.20 per troy ounce. The commodity earlier rose as high as $2,726.29 per troy ounce, or its highest price level since November 6th.

Gold Futures for delivery in February were edging down 0.27% on the day to trade at $2,749.19 per troy ounce.

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