Gold Prices Rise Amid U.S. Interest Rate Cut Expectations and Economic Concerns
Precious metal markets experienced a notable surge on Monday, with gold at the forefront, driven by expectations that the U.S. Federal Reserve (Fed) will cut interest rates next month, alongside disappointing economic data that raised investor concerns about global growth.
In terms of pricing, spot gold rose by 1.3%, reaching $4,053.00 per ounce. Additionally, U.S. gold futures for December increased by 1.2% to $4,060.40 per ounce.
These gains followed U.S. economic data that weakened market confidence. Last week’s reports indicated that the U.S. economy lost jobs in October, primarily due to declines in government and retail sectors, while cost-cutting measures and the adoption of artificial intelligence by companies led to an uptick in announced layoffs.
Moreover, concerns about the economic outlook intensified after a survey released on Friday revealed that consumer confidence in the U.S. fell to its lowest level in nearly three and a half years at the beginning of November, amid fears regarding the economic repercussions of the longest government shutdown in U.S. history.
A key factor driving gold prices is the anticipated monetary policy of the U.S. Federal Reserve. According to the "FedWatch" tool from CME Group, market participants expect a 67% probability that the Fed will reduce interest rates in December.
Gold, which does not yield interest, is viewed as a safe-haven asset that tends to appreciate in low-interest-rate environments and during periods of economic volatility, making it appealing to investors in the current climate.
In related news, the U.S. Senate appeared poised on Sunday to advance a procedure aimed at reopening the federal government and ending a 40-day shutdown, a development expected to influence market stability.
Gold was not the only metal to see gains, as other precious metals also performed positively. In spot transactions, silver rose by 1.1% to $48.84 per ounce, platinum increased by 1.2% to $1,563.25, and palladium climbed by 1.2% to $1,396.75.
