Gold Hits Two-Week High as Weak US Data Sparks Fed Rate Cut Speculation
Gold prices increased by over 1% to reach a near two-week high on Wednesday, following favorable U.S. economic data that bolstered expectations of a Federal Reserve interest rate cut next month, thereby supporting non-yielding bullion. Spot gold rose by 1% to $4,172.18 per ounce at 1208, marking its highest level since November 14, while U.S. gold futures for December delivery increased by 0.7%, reaching $4,168.70 per ounce. “Market participants are starting to price in again a U.S. rate cut for December,” said analyst Giovanni Staunovo. Bullion, recognized as a non-yielding asset, typically shows strong performance in environments characterized by low interest rates. “We continue to see further upside in the near term, with a year-end forecast of $4,200/oz and $4,500/oz mid next year,” Staunovo stated.
On Tuesday, data revealed that U.S. retail sales in September increased less than anticipated, whereas producer prices aligned with forecasts. In November, U.S. consumer confidence showed signs of decline as households expressed increasing worries regarding employment and their financial prospects. The data releases came after a string of recent dovish remarks from Fed policymakers.
Traders currently perceive an 83% likelihood of a Fed rate cut next month, a significant increase from the 30% observed just a week prior, as per indication. Further backing for the metal was provided by a report indicating that White House economic adviser Kevin Hassett has become the leading candidate to assume the role of the next Fed chair, bolstering anticipations of a dovish policy stance preferred by President Donald Trump.
Investors are now looking forward to the U.S. weekly jobless claims report set to be released later Wednesday, which serves as a crucial indicator for the health of the labor market and the potential direction of Fed policy. Meanwhile, Deutsche Bank has elevated its 2026 gold forecast to $4,450 an ounce from $4,000, attributing this adjustment to stabilizing investor flows and ongoing demand from central banks. Spot silver increased by 2% to $52.43 per ounce, platinum saw a rise of 0.6% to $1,562.50, and palladium experienced a gain of 1%, reaching $1,411.57.
