Gold Prices Rise Amid Expectations of U.S. Rate Cuts and Economic Concerns
Gold prices experienced a notable increase on Monday, supported by expectations that the U.S. Federal Reserve (Fed) may cut interest rates next month, coupled with weak economic indicators that have raised concerns about global growth.
Specifically, spot gold rose by 1.3% to $4,053.00 per ounce. Meanwhile, U.S. gold futures for December delivery increased by 1.2% to $4,060.40 per ounce.
These gains occurred against a backdrop of U.S. economic data that weakened market confidence. Last week's reports indicated job losses in the U.S. economy during October, primarily in government and retail sectors, while cost-cutting measures and the adoption of artificial intelligence led to an uptick in announced layoffs.
Moreover, economic concerns deepened following a survey released on Friday, which revealed that consumer confidence in the U.S. had fallen to its lowest level in nearly three and a half years at the beginning of November, amid fears over the economic repercussions of the longest government shutdown in U.S. history.
The primary driver behind rising gold prices remains expectations regarding the Fed's monetary policy. According to the CME Group's "FedWatch" tool, market participants anticipate a 67% likelihood that the Fed will lower interest rates in December.
Gold, which does not yield returns, is viewed as a safe-haven asset that tends to appreciate in low-interest-rate environments and during economic turbulence, making it attractive to investors under current conditions.
In contrast, the U.S. Senate appeared poised on Sunday to take steps toward reopening the government, potentially ending a shutdown that has lasted for 40 days, a development expected to impact market stability.
Gold was not the only metal to see gains; other precious metals also performed well. In spot trading, silver rose by 1.1% to $48.84 per ounce, platinum increased by 1.2% to $1,563.25, and palladium saw a 1.2% rise to $1,396.75.
