Precious Metals Rally as Dollar Weakens and Rate-Cut Bets Intensify

Gold and silver extended their upward momentum on Monday, driven by a softer U.S. dollar and growing confidence in an imminent Federal Reserve rate cut. Gold closed the session with a gain of nearly $20 per ounce, marking its highest level in over a month. Silver outperformed with a dramatic surge to a historic record of $58.48 per ounce, underscoring strong investor demand.

The slide in the dollar index to a two-week low provided a solid boost for precious metals, which typically strengthen when the greenback retreats. Market expectations for monetary easing also intensified, with traders now pricing in a 100% probability of a 25-basis-point rate cut at the Fed’s December 9–10 meeting—up sharply from just 30% two weeks earlier.

Safe-haven demand has been rising amid political and economic uncertainty, amplified by speculation over potential changes in Federal Reserve leadership. A recent report suggested that a policy-dovish candidate is being considered to succeed Jerome Powell, fueling debate over the central bank’s independence and future direction.

Geopolitical tensions, ongoing tariff concerns, and persistent central-bank buying further supported the metals. Gold in particular benefited from sustained accumulation by major institutions. China’s central bank increased its reserves in October to 74.09 million ounces, marking a full year of consecutive monthly purchases. Globally, central banks bought 220 tons of gold in the third quarter, a 28% rise from the previous quarter.

Silver’s rally received an extra push from tightening supply signals. Inventories at the Shanghai Futures Exchange dropped to 519,000 kilograms in late November—their lowest level in ten years—raising concerns of shortages at a time of heightened industrial and investment demand.

Despite some price pressure since mid-October due to profit-taking and declining ETF holdings after hitting three-year highs, both metals remain firmly supported. A weaker dollar, expectations of a Fed rate cut, and robust central-bank demand continue to anchor the bullish trend for gold and silver as the year draws to a close.