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Gold prices climbed in Asian trading on Wednesday, supported by a softer U.S. dollar and growing conviction that the Federal Reserve will cut interest rates in December. Haven demand also remained firm despite a broader risk-on rally across global markets.
Spot gold rose 0.9% to $4,166.13 an ounce, while February gold futures gained 0.9% to $4,201.15 by 00:24 ET (05:24 GMT).
Weak U.S. Data Fuels Rate-Cut Momentum
Gold extended its sharp gains from Tuesday after a series of middling U.S. economic readings strengthened the case for further monetary easing.
- Retail sales grew only marginally in September
- Core producer inflation cooled more than expected
These September figures will be among the final economic indicators available to the Fed before its December 9–10 policy meeting, as the prolonged government shutdown is expected to delay the release of October labor and inflation data indefinitely.
Separately, the PCE price index—the Fed’s preferred gauge of inflation—has been rescheduled for release on December 5.
With two Fed officials publicly supporting near-term easing, markets have sharply increased their expectations for a December cut. CME’s FedWatch Tool now shows an 80.7% probability of a 25-basis-point reduction, up from 42.4% a week earlier.
Haven Demand Stays Firm Amid Geopolitical Tensions
Safe-haven flows into gold remained robust amid:
- ongoing tensions between Japan and China
- uncertainty surrounding a potential Russia-Ukraine ceasefire
- concerns over stretched fiscal spending in major economies
Broad Metals Complex Gains
Other precious metals moved higher as rate-cut bets intensified:
- Spot silver rose 1% to $52.0215/oz, nearing record highs
- Spot platinum increased 0.2% to $1,559.90/oz
In industrial metals, LME copper futures climbed 0.3% to $10,992.90 per tonne after Chilean producer Codelco signaled sharper-than-expected price increases for Chinese buyers.
Lower interest rates generally benefit non-yielding assets like gold by reducing the attractiveness of rate-sensitive assets such as U.S. Treasuries.
Dollar Weakness Adds Support
Gold and broader metals also benefitted from dollar softness, with the U.S. currency retreating from recent six-month highs on expectations of lower interest rates.
The Dollar Index has fallen 0.5% from its recent peak, making dollar-priced commodities cheaper for global buyers and providing additional upside momentum for gold.
