Gold prices surged $97, reaching a three-week high amid a weakening dollar and growing expectations of Federal Reserve interest rate cuts. The precious metal traded above $2,100 per ounce,bolstered by declining U.S. Treasury yields and increasing market confidence in near-term monetary easing.
The rally comes as markets now assign a 68% probability too a 25 basis point rate cut in the next Federal Reserve meeting, up from 64% previously. This shift in expectations is directly supporting gold’s bullish momentum, offering a haven for investors sensitive to currency fluctuations and economic policy.A rebound in the U.S. dollar could quickly reverse these gains, according to analysts.
Tim Waterer, chief analyst at KCM Trade, attributed gold’s recent gains primarily to the dollar’s decline, stating that any strengthening of the U.S. currency would likely impact gold’s performance. He noted the potential for further gains in the medium term, given the continued downward trend in American yields.
Further fueling optimism, Federal Reserve council member Stephen miran suggested that a more considerable rate cut might be warranted in December, citing declining inflation and rising unemployment figures. CME Fed Watch data reflects this sentiment, indicating increased anticipation of dovish monetary policy.
