Gold prices edge higher on weaker dollar ahead of Fed decision
Gold prices edged higher Wednesday, drawing support from a weaker dollar as investors awaited next week’s Federal Reserve meeting, where an interest rate cut is broadly expected.
At 08:40 ET (13:40 GMT), spot gold last traded 0.4% higher to $4,221.17 an ounce and U.S. Gold Futures gained 0.8% to $4,252.90 an ounce.
The yellow metal had hit a six-week high of $4,264.29/oz earlier this week.
Dollar weakness helps gold
Markets are now pricing in roughly a 90% probability of a rate cut at the Fed’s December 9–10 meeting, according to CME’s FedWatch tool.
A dovish tilt has pushed the U.S. dollar lower -- the US Dollar Index has dipped toward its weakest levels since mid-November -- rendering gold more attractive for overseas buying.
At the same time, softening signals from U.S. economic data have reinforced speculation about rate cuts.
Market participants are awaiting the release of the delayed September Personal Consumption Expenditures Price Index (PCE) scheduled for Friday, the Fed’s preferred gauge of inflation.
Potential Fed leadership change adds to dovish narrative
Markets are also speculating about a leadership change at the Federal Reserve. Reports suggest that Kevin Hassett, a White House economic adviser known for his support of lower interest rates, is a front-runner to succeed current Chair Jerome Powell.
That possibility has added to the anticipation of a softer monetary policy stance under new leadership, bolstering gold’s safe-haven appeal.
Central banks boost gold purchases
Global central banks stepped up gold buying in October, adding a net 53 tonnes to reserves, according to data from the World Gold Council.
"This marks a 36% increase from September and the strongest monthly gain since November 2024," said ING. "Year-to-date purchases stand at 254 tonnes, a slower pace than the previous three years as higher prices temper demand."
Poland remains the standout buyer, leading both October and year-to-date with 83 tonnes. After a five-month pause, the National Bank of Poland resumed purchases, adding 16 tonnes last month and lifting its holdings to 531 tonnes, or 26% of total reserves. Brazil matched Poland’s October purchases. It added 16 tonnes for a second consecutive month, bringing its reserves to 161 tonnes (6% of total reserves). China’s central bank, another top buyer, reported gold purchases for 12 consecutive months, adding 0.9 tonnes in October, lifting the total to 2,304 tonnes.
In contrast, Russia was the only seller during the month, trimming holdings by 3 tonnes.
Metal markets subdued
Other precious and industrial metals traded in tight ranges on Wednesday as investors remained on the sidelines ahead of the Fed decision.
Silver Futures gained 1.1% to $59.345 per ounce, just below record highs of $59.65. Platinum Futures fell 1.7% to $1,655.0/oz.
Benchmark Copper Futures on the London Metal Exchange gained 2.3% to $11,445.0 a ton, while U.S. Copper Futures rose 2.8% to $5.3890 a pound.
Source: Investing.com
