Gold Holds Steady as Markets Bet on December Fed Rate Cut

Gold prices held firm in muted trading on Thursday, stabilizing near $4,158 as global markets leaned further toward the view that the US Federal Reserve will deliver a 25-basis-point rate cut in December. With US markets closed for the Thanksgiving holiday, overall liquidity remained thin, yet conviction surrounding imminent monetary easing continued to support demand for the precious metal.

Despite the quiet session, the tone across global markets reflected a growing belief that the Fed is preparing to shift toward a softer policy stance. The latest round of US economic data showed steady labor market conditions and further cooling in inflation, reinforcing the argument for lower interest rates. Market pricing now reflects roughly 85% confidence in a quarter-point cut, a move that would bring the target range down to 3.50%–3.75%.

Lower Yields Provide a Tailwind

Gold benefitted from a continued pullback in US Treasury yields, with the benchmark 10-year yield drifting below 4%. Lower yields typically reduce the opportunity cost of holding non-interest-bearing assets such as gold, offering additional support to bullion prices even in a low-volume trading environment.

However, the support was partially offset by improving geopolitical signals in Eastern Europe. Early indications of progress in peace discussions between Russia and Ukraine dampened some of the safe-haven demand that typically lifts gold during periods of geopolitical tension. Even so, other developments across Asia helped balance the outlook.

Geopolitical Tensions in Asia Keep a Floor Under Prices

Tensions between China and Japan re-intensified after remarks from Tokyo expressing support for Taiwan’s autonomy. The shift injected a degree of uncertainty back into the regional landscape, helping maintain a floor under gold prices. Historically, any increase in geopolitical risk—particularly involving major global powers—supports safe-haven assets, and Thursday’s dynamics were no exception.

Economic Data Paints a Mixed Picture

Fresh US labor-market figures offered more clues about the economic backdrop. Initial jobless claims fell to 216,000 during the week ending November 22—well below expectations and the lowest reading since April. The data reinforced the idea that the US labor market remains resilient, even as inflation and consumer spending cool.

At the same time, the latest producer-price data signaled further easing in underlying inflation pressures, while retail spending showed signs of fatigue. Together these indicators point to a slowing but steady economy, giving policymakers more room to pivot toward rate cuts without fear of overstimulating demand.

In Asia, physical gold shipments from Hong Kong to mainland China slipped, suggesting a temporary slowdown in consumer and wholesale demand. Although China remains the world’s largest gold buyer, fluctuations in physical flows often influence near-term sentiment.

Market Outlook: Consolidation Continues

Gold hovered near $4,160, remaining comfortably above the $4,100–$4,150 support zone. Traders have attempted—but so far failed—to push prices toward the psychological $4,200 threshold. A clear break above that level could open the door to further gains, with market attention geared toward potential tests of $4,250, $4,300, and eventually the all-time high near $4,381.

On the downside, failure to defend the current floor may expose prices to the $4,074 region and possibly $4,000, although the broader trend remains supported by the prospect of easing US monetary policy.

A Market Waiting for December

With the bulk of global investors waiting for the Fed’s December meeting, gold continues to trade in a consolidation pattern—firm, supported, and sensitive to any shifts in macroeconomic expectations. Whether the precious metal breaks out of its current range will depend largely on whether the Fed confirms the market’s strong conviction that rate cuts are finally on the horizon.