Gold rises to the highest level in almost two weeks early Wednesday on bets of rate cut by the Federal Reserve next month and a weaker dollar.
The sentiment around a rate cut has shifted in the past week on lackluster U.S. consumer data and hawkish language from Fed officials. A rate cut would be considered bullish for gold, making it a more attractive alternate investment. Declines in the dollar are also supportive for gold, making it a cheaper buy for holders of other currencies.
February gold futures rose 1.1% Tuesday to settle at $4,177.30 an ounce on Comex, and the most-active contract gained 1.5% in the first two days of the week. Bullion is up 4.5% this month after increasing 3.2% in October and surging 10% in September, the most in six months. It’s up 58% this year. The metal rose 27% in 2024, its biggest annual gain since 2010. The February contract is currently up $6.10 (+0.15%) an ounce to $4283.40 and the DG spot price is $4149.80.
U.S. financial markets will be closed Thursday for the Thanksgiving holiday.
U.S. consumer confidence for November slid by the most in seven months in data out Tuesday, signaling increased concerns about the labor market and the economy, factors closely watched by the Fed when setting monetary policy. The Conference Board’s November gauge dropped 6.8 points to 88.7 and was weaker than all estimates in a Bloomberg survey of economists.
Long-delayed wholesale prices for September also came out Tuesday and showed that they rose less than expected. But the producer price index data, postponed from October by the U.S. government shutdown, may already be dated. A significant amount of government data on inflation and the labor market was either delayed or won’t be released because of the shutdown which ended earlier this month.
Sentiment around a rate cut began to shift Friday, when New York Fed President John Williams, said that a near-term rate cut remains a possibility. The Fed has said it closely watches both the labor market and inflation when setting monetary policy. The private payrolls report from ADP is due out next week with November figures.
Almost 83% of the investors tracked by the CME FedWatch Tool are betting that the Fed will cut rates by 25 basis points in December, while the rest expect rates to stay unchanged. That’s a switch from a week ago, when just 30% of investors were anticipating a rate cut.
October’s interest rate reduction to 3.75% to 4.00% was the second 25-basis point reduction in a row. The central bank began raising interest rates in March 2022 to fight inflation, ultimately imposing increases of by 5.25 percentage points before beginning rate cuts last year.
March silver futures increased 1.3% Tuesday to settle at $51.63 an ounce on Comex and are up 2.1% so far this week. Silver is up 7.2% in November after rising 3.3% in October and adding 15% in September, the biggest monthly rally in two and a half years. It’s up 77% this year after rising 21% in 2024. The March contract is currently up $1.036 (+2.01%) an ounce to $52.665 and the DG spot price is $52.28.
Spot palladium increased 0.5% Tuesday to $1,410.00 an ounce and is up 1.6% in the first two days of the week. Palladium is down 2.4% in November after rising 14% in October and gaining 14% in September. Palladium is up 52% this year after dropping 17% in 2024. The DG spot price is currently up $17.20 an ounce to $1424.50.
Spot platinum advanced 0.9% Tuesday to $1,564.80 an ounce and is up 2.7% so far this week. It’s down 1.2% in November after rising 1% in October and gaining 15% in September. Platinum is up 71% in 2025 after losing 8.4% in 2024. The current DG spot price is up $12.90 an ounce to $1571.30.
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