Gold Price Reaches Three-Week High Amid US Rate Cut Expectations
On Tuesday, gold prices surged to their highest level in approximately three weeks, fueled by growing expectations that the US Federal Reserve will cut interest rates next month, prompting investors to seek the metal as a safe haven.
In the spot market, gold prices increased by 0.4% to $4,135.55 per ounce, while US gold futures for December delivery rose by 0.6% to $4,147.60 per ounce.
This rise comes in the context of recent US economic data indicating a decline in the labor market and consumer confidence, with the US economy losing jobs in October, particularly in the public sector and retail. Additionally, consumer confidence fell to its lowest level in three and a half years in November, amid concerns over the impact of the longest government shutdown in US history.
According to the CME Group's "FedWatch" tool, traders now see a 64% probability that the Federal Reserve will lower interest rates by 25 basis points next month.
Stephen Miran, a member of the Federal Reserve Board, confirmed on Monday that a 50 basis point cut in December would be appropriate, citing declining inflation and rising unemployment rates.
Gold, which does not yield interest, tends to benefit from a low interest rate environment and sees increased demand during times of economic uncertainty.
It is noteworthy that the US Senate approved a compromise on Monday that ended the longest government shutdown in US history, resolving a crisis that disrupted food assistance for millions and withheld paychecks from hundreds of thousands of federal employees.
