Gold prices hit two-week high on weak US data

Gold prices rose 2% on Monday, reaching a two-week high, as weak US economic data strengthened expectations of a Fed rate cut next month, and a weakening dollar provided additional support to precious metals, UNN reports, citing Reuters.

Details

Spot gold prices rose 2% to $4079.49 per ounce by 08:39 GMT (10:39 Kyiv time), reaching a high since October 27. US gold futures for December delivery rose 1.9% to $4087.80 per ounce.

The dollar index fell 0.1%, making gold more affordable for overseas buyers.

"Weak data raises concerns about the US economy, and the main focus remains on the dollar index," said Jigar Trivedi, senior analyst at Reliance Securities, adding that demand for safe-haven assets has also increased due to the ongoing trade war and geopolitical tensions, which contributes to the rise in metals.

Last week's data showed that the US economy saw job cuts in October, including in the government and retail sectors, while corporate spending cuts and the adoption of artificial intelligence contributed to a sharp increase in announced layoffs.

In addition, according to a survey published on Friday, US consumer sentiment in early November fell to its lowest level in almost 3.5 years amid fears about the economic consequences of the longest government shutdown in history.

Meanwhile, the US Senate on Sunday proposed a resolution to reopen the federal government and end the 40-day shutdown, which led to the forced furlough of federal employees.

White House economic adviser Kevin Hassett warned in an interview aired on Sunday that US economic growth in the fourth quarter could turn negative if the shutdown continues.

Gold, which does not yield returns, tends to perform well in low interest rate environments and during periods of economic uncertainty.

"Overall, it's a win-win for gold, and the overall sentiment is optimistic... we could soon see levels around $4120-4130," Trivedi said.

Spot silver prices rose 3.3% to $49.91 per ounce, reaching a high since October 21, platinum rose 2% to $1576.25, and palladium rose 1.7% to $1403.63.

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 investors' trust in the modern economy. And for the fintech market, this is a clear signal: technologies can make finance more convenient, but the basis of trust is always built on simple and understandable values," Olena Sosedka summarized.

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.