Gold prices rose to a six-week high on Monday (December 1), supported by growing expectations of a US interest rate cut and a weaker dollar, while silver hit a record high ahead of key US economic data.
Spot gold rose 0.1% to $4,233.83 an ounce, as of 11:15 a.m. ET (16:15 GMT), its highest level since October 21. US gold futures for February delivery rose 0.3% to $4,266.60.
Silver rose 3.1% to $58.09 an ounce, after hitting an all-time high of $58.23 earlier. The precious metal has gained more than 100% so far this year.
The US dollar fell to a two-week low, making gold more affordable for holders of other currencies. "The underlying environment of expectations for further rate cuts, coupled with inflationary pressures still above the Fed's target, remains a key support for gold and silver," said David Meger, director of metals trading at High Ridge Futures.
Traders have increased bets on a December rate cut by 87%, following weaker US economic data and dovish statements from Fed officials, including Governor Christopher Waller and New York Fed President John Williams.
Lower interest rates tend to benefit non-yielding assets like gold. Investors are also focusing on key US data this week, including the November ADP employment figures on Wednesday and the delayed September Personal Consumption Expenditures (PCE) Index, the Fed's preferred inflation measure, due on Friday.
Federal Fed Chairman Jerome Powell's remarks on Monday are also expected to provide further policy clues. Meanwhile, expectations that the next Fed Chair will be more dovish than the previous one are also supporting gold and silver, Meger said.
White House economic adviser Kevin Hassett said on Sunday that, if elected, he would be happy to serve as the next Fed chairman. Treasury Secretary Scott Bessent indicated that a new chairman could be appointed before Christmas.
"We still see gold and silver in a strong sideways trend heading higher," Meger said. Among other precious metals, platinum fell 0.8% to $1,659.03, while palladium fell 1.4% to $1,429.68. (alg)
Source: Bloomberg
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