Gold Prices Climb as Silver Hits Record Highs Amid Anticipation of US Rate Cuts
Gold prices increased on Wednesday, buoyed by rising market expectations for an imminent rate cut by the Federal Reserve, while silver surged to unprecedented levels due to robust supply factors.
In today's market, spot gold rose by 0.1% to $4,212.50 per ounce, attempting to recover from a more than 1% decline in the previous trading session. Concurrently, US gold futures for December delivery increased by 0.7% to $4,250.80 per ounce.
This uptick reflects investor anticipation ahead of key US economic data that could influence future monetary policy. Notable reports include the ADP private sector employment data for November and the personal consumption expenditures index for September, which is the Fed's preferred inflation measure, both set to be released on Friday.
Speculation surrounding the timing of a rate cut has intensified following recent economic data indicating a slight slowdown in growth, heightening expectations for action from the Fed during its upcoming meeting on December 9-10. The CME's FedWatch tool currently indicates an 89% probability of a rate cut next week, up from 85% a week earlier.
Analysts note that a low-interest-rate environment typically enhances gold's appeal as a non-yielding asset. Brian Lan, managing director of Gold Silver Central, stated: "Recent profit-taking in gold, along with a shift towards cryptocurrencies or equities, is expected. We anticipate a strong recovery, especially with the increasing likelihood of rate cuts as the year concludes."
In a similar vein, silver prices rose by 0.4% to $58.73 per ounce, having reached a new record of $58.94 during the session. Analysts attribute this increase to strong fundamental supply factors.
Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai, explained: "Silver's rise is driven by a genuine supply shortage, as we are seeing a decline in inventories at Comex and in China. Consequently, the fundamentals for silver appear very strong."
Additionally, the World Gold Council's latest data indicates that central banks remain active in the gold market, with 53 tons purchased in October, marking a 36% monthly increase and the highest net monthly demand since early 2025.
In a related political development, US President Donald Trump announced on Tuesday that he plans to reveal his nominee to succeed Jerome Powell as head of the Federal Reserve early next year, adding further anticipation to the monetary policy outlook in the US.
