Gold prices edged higher on Tuesday (November 25) as weaker-than-expected US retail sales data reinforced traders' expectations that the Federal Reserve will cut interest rates in December.

Spot gold rose 0.3% to $4,150.09 an ounce at 12:16 p.m. EST (1716 GMT). Gold prices earlier in the day hit their highest level since November 14, and rose nearly 2% on Monday after several US central bank policymakers signaled support for a third rate cut this year at their December 9-10 meeting.

US gold futures for December delivery rose 1.3% to $4,147 an ounce.

"There were renewed expectations for a December rate cut based on the Fed's recent dovish statements, and this doesn't seem to change that," said Peter Grant, vice president and senior metals strategist at Zaner Metals.

US retail sales increased less than expected in September, taking a pause after a recent string of strong gains, while the Producer Price Index rose 2.7% in the 12 months to September, matching the increase in August.

Markets are pricing in an 83% chance of a Fed rate cut next month—compared to 30% last week—and a 64% chance of another reduction in borrowing costs in January, according to CME Group data.

Fed Governor Stephen Miran said on Tuesday that the deteriorating labor market calls for further rate cuts, echoing dovish remarks from Fed Governor Christopher Waller on Monday.

Non-yielding gold tends to perform well in low-interest-rate environments and during times of geopolitical and economic instability.

"The underlying conditions of ongoing economic uncertainty, geopolitical turbulence, and dovish Fed expectations continue to support gold prices (in the short term)," said ActivTrades analyst Ricardo Evangelista.

Spot silver was flat at $51.40 per ounce, platinum rose 0.4% to $1,550.31, and palladium rose 0.1% to $1,396.18. (alg)

Source: Reuters.com