Gold Prices Rise Amid Weak Dollar and Fed Rate Cut Speculation
Gold prices saw an uptick during Monday's trading, driven by a weaker US dollar and growing speculation that the Federal Reserve will reduce interest rates in its forthcoming meeting, thereby increasing demand for the metal as a safe haven.
Spot gold prices rose by 0.4% to $4,215.38 per ounce, while December futures contracts remained steady at $4,243.70 per ounce. This increase coincided with a drop in the US dollar, nearing its lowest point in six weeks, recorded on December 4, which lowers the cost of gold for investors holding other currencies.
This trend is supported by recent US economic data indicating a slowdown in growth, with consumer spending showing a "moderate increase in September, following three months of robust gains." Additionally, private sector payroll data revealed "the largest decline in over two and a half years."
On the monetary policy front, recent dovish comments from Federal officials have strengthened market expectations. According to the CME's "FedWatch" tool, there is an "88.4% probability of a 25 basis point rate cut during the Federal Reserve's meeting on December 9 and 10."
In related developments, other precious metals exhibited mixed performance, with silver stabilizing at $58.25 per ounce, platinum increasing by 0.3% to $1,646.56, while palladium decreased by 0.5% to $1,455.55 per ounce.
Investors are closely monitoring the upcoming Federal Reserve decision, which is anticipated to influence the short-term trajectory of gold and currency markets.
