Gold trades near $1,800 as recession fear spurs safe-haven demand

Despite the fact that gold prices are below the key level on Thursday, gold's upside potential remains. In view of the increased risks of a recession, concerns are growing among investors, who have become more active in buying gold as a defensive asset.

On Wednesday, gold prices were rising rapidly. This was happening against the background of increasing talk about a recession in the United States in the coming year. The reasons for that may be a further increase in interest rates and soaring inflation.

Assumptions that the dollar has passed its peak this year put pressure on the U.S. currency, leading to inflows into gold.

Friday's release of November data on U.S. producer inflation will be the centerpiece of the week. The data will help analyze the dynamics of price pressures in the country.

A smaller step in interest rate hikes is expected in the coming week. Nevertheless, the Fed urges to be prepared for the fact that in conditions of steady inflation, the final peak in U.S. interest rates will be higher than expected.

Rising U.S. interest rates have put significant pressure on gold prices this year. A continuation of the Fed's hawkish policy is likely to weaken gold even more.