Spot gold prices rose 1% to a two-week high on Friday (November 28th), as expectations that the Federal Reserve will cut interest rates next month boosted demand for the non-yielding asset, while silver hit a new record high.

Spot gold prices rose 0.9% to $4,192.78 an ounce at 10:09 a.m. ET (1510 GMT), the highest since November 14th, and are expected to post a weekly gain of 2.9%. Bullion prices, which are expected to gain 4.6% this month, are on track for their fourth consecutive monthly gain.

Silver rose to a new record high of $55.33 an ounce, up 3.5% for the session and 13% for the month. Futures trading resumed around 1:30 PM GMT, after an hours-long outage at the CME Group halted trading on its currency platform and in futures markets covering foreign exchange, commodities, government bonds, and stocks.

U.S. gold futures for February delivery rose 0.61% to $4,227.60 per ounce.

FED RATE IN FOCUS

"The expectation is that we will continue to experience an economic slowdown through 2026, and the Federal Reserve will likely cut interest rates, which will encourage some investors to reinvest" in gold, said Bart Melek, head of commodity strategies at TD Securities.

Gold tends to perform well in a low-interest rate environment. Recent dovish statements from Fed Governor Christopher Waller and New York Fed President John Williams, combined with weaker U.S. economic data following the government shutdown, have strengthened expectations that the central bank will cut interest rates next month. Traders see an 89% chance of a rate cut in December, up from 50% last week.

Meanwhile, "the technical charts for silver have turned more bullish in the past week, and that's inviting chart-based speculators to take long positions in the silver market," said Jim Wyckoff, senior analyst at Kitco Metals.

Gold demand weakened in key Asian markets this week, as high prices curbed retail buying even as India entered its wedding season. In China, the removal of a tax exemption on gold purchases dampened consumer interest.

Platinum rose 2.9% to $1,655.14, up 9.7% for the week, while palladium rose 5.6% to $1,519.37 and is expected to post a weekly gain of 10.7%. (alg)

Source: Reuters.com