Gold climbs on Fed cut bets as silver hits record high
Gold climbs on Fed cut bets as silver hits record high
Gold rises on optimism of a Fed rate cut next week, while silver surges to fresh records amid dollar weakness and strong demand signals.
Gold prices rose on Friday as mounting expectations of a U.S. Federal Reserve rate cut next week buoyed sentiment, while silver surged to a record high. Spot gold was up 1% to $4,212.16 per ounce at 1:36 p.m. ET (1836 GMT), with U.S. gold futures for February delivery settling unchanged at $4,243 per ounce. The market is increasingly confident that the central bank is going to cut rates, and in response to that, the dollar weakened a bit, which is accretive for gold, said Bart Melek, global head of commodity strategy at TD Securities.
U.S. data showed the core Personal Consumption Expenditures (PCE) Price Index rose 0.3% in September, with the annual increase slowing to 2.8% from 2.9% in August. Private payrolls data revealed the sharpest decline in over two-and-a-half years last month, reinforcing the case for monetary easing and keeping the Fed in focus. CME's FedWatch tool indicated an 87.2% probability of a 25-basis-point rate cut at the Fed's December 9-10 meeting.
Analysts see gold’s outlook as contingent on how the Fed communicates its stance. “The market is looking for the central bank to ease, and that outlook has kept gold supported,” said Alex Ebkarian, COO at Allegiance Gold, who sees gold trading between $4,200 and $4,500 this year, with the potential to reach $5,000 next year depending on policy moves. Silver rose 2.6% to $58.59 an ounce, up 4% for the week, after touching a record $59.32 earlier. The white metal’s rally has been underpinned by structural deficits and rising demand for electrification.
On the demand side, physical gold buying in India and China cooled this week as buyers waited for a price correction, even as sentiment for precious metals remains constructive amid macro uncertainty. In other metals, platinum stood at $1,646.10 and palladium gained 0.3% to $1,453.39, underscoring a broad metals complex that is reacting to shifting expectations for monetary policy and the global economy.
As the Fed meeting approaches, traders will be watching for signals on how much easing the central bank plans and how the data flowing in, including inflation and labor metrics, could shape the trajectory of gold and silver in the coming weeks.
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