Gold and Silver Prices Surge Amid US Rate Cut Speculations
Gold and silver markets saw substantial gains at Friday's close, fueled by growing speculation that the US Federal Reserve may reduce interest rates in the upcoming month. This shift has elevated interest in safe-haven assets like gold, which do not provide yield.
Gold prices rose by 1.76%, reaching $4,230.37 per ounce, the highest level since November 13. The precious metal is expected to finish the week with a 3.6% increase and a 5.2% rise for the month, marking the fourth consecutive monthly gain.
Similarly, silver prices climbed to a record high of $56.78 per ounce, up 6.1% during the session and 16.6% month-over-month.
This upward trend followed the resumption of futures trading on the CME at approximately 8:30 AM Eastern Time after a brief technical disruption. US gold futures for February settled up 1.3% at $4,254.90 per ounce.
Analysts weighed in on the situation, with Bart Melek, head of commodity strategy at TD Securities, stating: "The anticipated economic slowdown is likely to persist until 2026, increasing the likelihood of Federal Reserve interest rate cuts, which may attract investors back to gold."
Jim Wyckoff, senior analyst at Kitco Metals, noted a positive shift in market sentiment, stating: "Recent technical indicators for silver have improved, encouraging speculators to invest in gold."
Statements from Federal Reserve officials, including Governor Christopher Waller and New York Fed President John Williams, alongside disappointing economic data following the recent government shutdown, have strengthened expectations for a rate cut next month. The likelihood of a December rate cut has surged to 87%, up from 50% the previous week.
Conversely, demand for gold in key Asian markets has decreased this week as high prices have restricted retail purchases, even with the onset of the wedding season in India. In China, the removal of the tax exemption on gold purchases has further dampened consumer interest.
