Gold Speeds Up Ahead of December, What's Behind the Rise?
Global gold prices strengthened in Friday trading and are poised to post a fourth consecutive monthly gain, driven by market confidence that the US Federal Reserve will cut interest rates in December. Spot gold rose about 0.8% to $4,189.61 per ounce at 03:03 GMT, its highest level since November 14, and is expected to strengthen by about 3% for the week. Monthly, gold bullion has the potential to post a gain of nearly 3.9%, while December gold futures rose about 0.5% to $4,221.30 per ounce.
According to analysts, thin liquidity conditions have actually made gold price movements appear sharper as many market participants have begun to "pre-position" in anticipation of a lower interest rate era. US interest rate futures now estimate about an 87% chance of a Fed rate cut in December, up from 85% the day before and 50% a week ago. These expectations grew stronger after dovish comments from Mary Daly (San Francisco Fed President) and Christopher Waller (Fed Governor). Furthermore, Kevin Hassett, the market's leading candidate to replace Jerome Powell as Fed Chair, also openly argued that interest rates should be lower, in line with US President Donald Trump's preference.
On the other hand, not all Fed officials agree on a rush to cut interest rates. Some regional Fed presidents still prefer to wait until inflation has moved more convincingly toward the 2% target. However, for gold, the overall narrative is clear: a lower interest rate environment and a weaker dollar are an ideal combination. The US dollar is currently heading for its worst week since late July, making dollar-priced gold increasingly attractive to foreign buyers. In other precious metals markets, spot silver rose about 1.4% to $54.18 per ounce, platinum jumped 1.7% to $1,634.82, and palladium fell slightly by 0.6% to $1,428.62, but is still on track to post a weekly gain of around 4%. (az)
Source: Newsmaker.id
