Gold prices near one-week high as Fed rate cut expectations boost demand
Gold prices rise to $4,162.90 per ounce, driven by increasing expectations of a US Federal Reserve rate cut, while silver and platinum also see gains.
Reuters reported that gold prices surged to near their highest levels in over a week on Wednesday as markets increasingly anticipate a rate cut by the US Federal Reserve next month. This has kept gold — a non-yielding asset — a preferred choice for investors in a low-interest-rate environment.
Spot gold rose 0.8%, reaching $4,162.90 per ounce by 3:00 p.m. Eastern Time (20:00 GMT), after hitting its highest level since November 14.
US Gold Futures for December delivery increased 0.5%, closing at $4,160.10 per ounce.
Edward Meir, an analyst at Marex, said the focus has shifted from the dollar to expectations of a rate cut in December. He added that gold’s upward movement is being supported by the anticipation of lower interest rates, even as the Dollar Index remains stable.
Investors expect a 66% chance of a 0.25% rate cut by the Fed in December, up from 30% last week, according to CME Group’s FedWatch Tool. The news has boosted gold prices, alongside reports that President Trump may soon nominate a new Fed chair to succeed Jerome Powell — with Kevin Hassett, former Economic Advisory Board Chair, being a leading candidate.
As Hassett has previously suggested, the next Fed chair may prefer lower rates than those under Powell, offering further support for gold’s appeal in the current environment.
Spot silver jumped 2.2%, reaching $52.52 per ounce, while platinum gained 0.8%, trading at $1,565.20, and palladium increased 0.6%, reaching $1,405.76.
However, these metals still saw declines over the course of the week.
Gold price update for November 27
According to Bloomberg, gold continued to rise, moving 0.1% higher to $4,165.82 per ounce as of 7:27 a.m. (Singapore Time), with the Bloomberg Dollar Spot Index falling by 0.3%. The silver price remained stable after Wednesday’s 3.7% rise, while palladium increased slightly, and platinum remained unchanged.
Gold has been supported by Fed officials’ comments suggesting further monetary easing in December. Market traders now estimate an 80% chance of a 0.25% rate cut next month, and recent US unemployment claims data are unlikely to deter the Fed from cutting rates.
