Gold continued to rise on Tuesday, reaching its highest level in more than a week, despite a strong dollar, after Federal Reserve officials signaled a possible rate cut in December. This was reported by Reuters, writes UNN.
Details
Spot gold price rose by 0.1% to $4,141.49 per ounce as of 06:31 GMT, reaching its highest mark since November 14, continuing its 1.8% growth on Monday.
US gold futures for December delivery rose by 1.1% to $4,139.10 per ounce.
(Gold is mostly) rising due to expectations of a rate cut… Over the past two weeks, expectations have sharply increased, which has led to a short-term recovery in gold prices.
The labor market is weak enough to warrant another quarter-point rate cut in December, although further action will depend on a large volume of data delayed by the government shutdown, Fed Governor Christopher Waller said on Monday.
Waller's comments came after New York Fed President John Williams said on Friday that US interest rates could fall "in the near future."
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Investors are now pricing in an 81% chance of a rate cut in December, compared to 40% last week, according to the CME FedWatch tool.
Gold, which does not yield profit, usually performs well in conditions of low interest rates.
Key economic data delayed by the government shutdown — including US retail sales, jobless claims, and the producer price index — are due to be released this week and are expected to provide more clarity on the Fed's rate-cutting path.
The dollar held near six-month highs reached last week, which curbed the rise in dollar-denominated gold prices.
In other metals: spot silver price remained stable at $51.43 per ounce, platinum rose by 0.7% to $1,553.65, and palladium by 0.3% to $1,399.96.
Recall
According to fintech expert and co-founder of Concord Fintech Solutions Olena Sosedka, the upward trend in gold prices is reinforced by the unstable geopolitical situation in the world.
"Wars, trade conflicts, unpredictable decisions of world leaders - all this creates an atmosphere of constant instability, in which gold becomes a universal insurance. So the jump in the value of gold is not just a financial event, it is a marker of investor confidence in the modern economy. And for the fintech market, this is a clear signal: technology can make finance more convenient, but the basis of trust is always built on simple and understandable values," - summarized Olena Sosedka.
She noted that the current increase in the value of gold is only the tip of the iceberg, because at the global level it indicates investors' preparation for a weakening dollar. The depreciation of the American currency makes gold more accessible to buyers in international markets, which, in turn, increases demand and stimulates further price growth.
The main drivers of stable demand for gold remain central banks, primarily China and Russia. They are actively increasing their gold reserves, effectively implementing a de-dollarization strategy and demonstrating a desire to reduce dependence on the American currency.