Gold advances as traders bet on December rate cut, await US data
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Gold has been in a consolidation phase since surging to a record high above US$4,380 an ounce in October.
PHOTO: AFP
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- Gold rose as traders anticipate a Federal Reserve interest-rate cut next month, influenced by weak labour market signs and supportive comments from Fed officials.
- Swap traders see an almost 80% chance of a rate cut at the Fed's Dec 9-10 meeting, despite policymakers' division and reliance on dated economic data.
- Gold remains in consolidation after an October record high, supported by trade uncertainty and fiscal concerns; analysts predict range-bound trading.
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NEW YORK – Gold gained as traders bet that the Federal Reserve will deliver an interest-rate cut in December amid signs of a weak labour market.
Fed governor Christopher Waller fuelled optimism on Nov 24 after indicating support for a rate cut in December. New York Fed president John Williams had a similar impact on the market last week after he said a near-term cut remains a possibility.
While the central bank’s December meeting is the next big milestone for markets, investors are relying on dated economic data due to delays caused by the US government shutdown.
Swap traders now see a nearly 80 per cent chance of a rate cut at the Fed’s upcoming Dec 9 to10 policy meeting. Policymakers appear deeply divided over whether another reduction will be appropriate following cuts in September and October. Bullion typically benefits in a lower-rate environment as it pays no interest.
Traders will be watching a slew of dated economic data slated to be released this week. They include September retail sales and producer-price data due Nov 25, as well as jobless claims on Nov 26.
September retail figures are expected to show a moderation as consumers remain squeezed by high prices. Jobless claims covering the November survey week will take on added importance as the Fed leans on alternative indicators in the absence of payroll figures.
The rate-cut path “is rather hard to predict and a close call, hence gold will likely stay clustering around the current level”, said Mr Ahmad Assiri, a strategist at Pepperstone Group.
“I don’t see an imminent big move in gold, rather a perfect set-up for two-way trades in a less volatile environment.”
The precious metal has been in a consolidation phase since surging to a record high above US$4,380 an ounce in October. It is still up around 56 per cent in 2025, supported by heightened trade and geopolitical uncertainty, as well as concerns over deteriorating fiscal outlooks for many governments.
Spot gold is now trading just above US$4,100 levels. The Bloomberg Dollar Spot Index was steady. Silver, platinum and palladium all advanced. BLOOMBERG
