Expectations that the US Federal Reserve (Fed) will cut interest rates in December continue to help gold become a popular asset.
At the close of trading on November 26, the world spot gold price increased by 32 USD to 4,162 USD. Previously, the price had reached 4,170 USD, the highest since the session on November 14.
“Investors’ focus has shifted away from the US dollar and towards the possibility of a December rate cut by the Fed,” said Edward Meir, an analyst at Marex. Gold prices continued to rise despite the stability of the US dollar index.
In addition, the US is likely to nominate a candidate for the position of Fed Chairman soon. “The person with the most advantage right now is White House Economic Advisor Kevin Hassett,” Meir said. Like US President Donald Trump, Hassett has repeatedly asserted that interest rates should be lower than they are now.
Gold does not pay interest and tends to rise in a low-interest-rate environment, so this news has sent the precious metal soaring. The CME FedWatch tool shows investors now see an 85% chance of the Fed cutting rates next month, up from 30% a week ago.
The number of new applications for unemployment benefits in the US fell last week, suggesting that layoffs remain low. However, the market is still not creating enough jobs to replace those who have lost their jobs due to recent economic turmoil.
Consumer confidence also weakened in November as many households worried about their jobs and financial prospects, after comments from several Fed officials that made policy easing a popular asset.
At the close of trading on November 26, the world spot gold price increased by 32 USD to 4,162 USD. Previously, the price had reached 4,170 USD, the highest since the session on November 14.
“Investors’ focus has shifted away from the US dollar and towards the possibility of a December rate cut by the Fed,” said Edward Meir, an analyst at Marex. Gold prices continued to rise despite the stability of the US dollar index.
In addition, the US is likely to nominate a candidate for the position of Fed Chairman soon. “The person with the most advantage right now is White House Economic Advisor Kevin Hassett,” Meir said. Like US President Donald Trump, Hassett has repeatedly asserted that interest rates should be lower than they are now.
Gold does not pay interest and tends to appreciate in a low-interest-rate environment. This news has sent the precious metal soaring. The CME FedWatch interest-rate tracker shows that investors now see an 85% chance of the Fed cutting rates next month, up from 30% a week ago. Gold prices are now at their highest since mid-November. Chart: Kitco
The number of new applications for unemployment benefits in the US fell last week, suggesting that layoffs remain low. However, the market is still not creating enough jobs to replace those who have lost their jobs due to recent economic turmoil.
Consumer confidence also weakened in November as many households grew concerned about their jobs and financial prospects, following dovish comments from several Fed officials.
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The outlook for gold remains positive, with most banks forecasting prices to remain above $4,000 an ounce next year. Deutsche Bank raised its average price forecast for next year to $4,450 from $4,000, citing steady investment flows and central bank demand.
In addition to gold, other precious metals also rose. Silver gained 3.3% to $53.10 an ounce. Platinum and palladium both rose more than 1% to $1,571 and $1,411, respectively.
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