Gold prices hit three-week high amid Fed expectations and US shutdown end

Gold prices rose on Tuesday to their highest level in nearly three weeks amid growing expectations of another interest rate cut by the US Federal Reserve in December and signs of an end to the US government shutdown. This was reported by Reuters, writes UNN.

Details

It is noted that the spot price of gold rose by 0.4% to $4,131.32 per ounce (as of 06:36 GMT), reaching its highest level since October 23. Gold futures for December delivery in the US rose by 0.4% to $4,137.50 per ounce.

The US Senate on Monday approved a deal that will restore federal funding and end the longest government shutdown.

Key economic indicators, such as the non-farm employment report, were delayed due to the government shutdown. The resumption of government operations in the coming days will provide more clarity on the US economic outlook and the path of Fed interest rates.

"The idea of the government shutdown ending was seen as removing a layer of uncertainty, which allowed markets to re-engage with one of the main speculative themes of the year," said Ilya Spivak, head of global macro analysis at Tastylive.

"For the rest of the year, the bias is still upwards. Currently, the path of least resistance for gold leads to the October high, and beyond that, we can expect even greater growth."

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Traders are pricing in about a 64% chance of a 25 basis point Fed rate cut next month, according to CME Group's FedWatch tool.

Fed Board member Stephen Miran said on Monday that a 50 basis point rate cut in December would be appropriate, noting that inflation is falling and unemployment is rising.

Other metals also showed gains: spot silver rose 0.5% to $50.81 per ounce, platinum rose 0.7% to $1,588.80, and palladium rose 1.1% to $1,430.54.

Recall

According to fintech expert and co-founder of Concord Fintech Solutions, Olena Sosedka, the trend of rising 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 rise 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.