02.01.202409:20:00UTC+00Gold Inches Higher On Fed Pivot Bets

Gold started the 2024 year on a firm note amid dovish Fed bets and signs of escalating geopolitical tensions.

Middle East tensions escalated after U.S. helicopters repelled an attack on Sunday by Iran-backed Houthi militants on a Maersk container vessel in the Red Sea, a vital trade route between Europe and Asia.

Spot gold rose 0.7 percent to $2,077.09 per ounce, while U.S. gold futures were up 0.7 percent at $2,085.65.

Investors should brace for volatility this week as various economic reports are lined for release.

U.S. reports on manufacturing and service sector activity may attract attention along with the minutes of the latest Federal Reserve meeting.

ADP's private payrolls report on Wednesday and December's jobs report on Friday may provide further evidence that the Federal Reserve is likely to cut interest rates this year.

Currently, the CME's FedWatch tool indicates a more than 85 percent chance that the Fed will deliver a rate cut in March and a cumulative of 150 basis points (bps) rate cut in the year.

The dollar traded firm on the first trading day of the year while bond yields ticked higher in thin trading.