Gold extended its gains as traders increasingly position for an interest-rate cut from the Federal Reserve in December, a move supported by fresh signs of weakness in the US labor market and cautious remarks from central bank officials.
Market sentiment shifted earlier this week after Federal Reserve Governor Christopher Waller signaled openness to a rate cut next month. His comments echoed those of New York Fed President John Williams, who last Friday said that a near-term reduction remains possible. With the December 9–10 policy meeting approaching, investors are operating with limited visibility, relying on earlier-than-usual economic releases due to delays tied to the US government shutdown.
Swap markets now price in nearly an 80% probability that the Fed will lower its benchmark rate at the upcoming meeting. Policymakers, however, remain split on whether a third consecutive cut—following reductions in September and October—is warranted. Gold typically benefits in easing-rate environments because the metal does not yield interest and becomes more attractive as borrowing costs decline.
Traders are preparing for a wave of delayed US economic reports expected this week. Tuesday will bring September retail sales and producer-price data, while Wednesday’s release of jobless claims is expected to take on outsized importance. Analysts anticipate softer retail activity as households continue to battle elevated costs. Meanwhile, jobless claims—covering the key November survey period—may serve as a substitute indicator for labor-market conditions in the absence of updated payroll numbers.
“The path for Fed cuts is extremely hard to pin down at this stage,” said Ahmad Assiri, strategist at Pepperstone Group Ltd. “Gold looks likely to remain range-bound, offering a stable setup for two-way trading in a low-volatility environment rather than any explosive breakout.”
Gold has been consolidating after its dramatic surge above $4,380 an ounce in October, a record high. Despite the pause, bullion remains up roughly 56% year-to-date, buoyed by intensifying geopolitical risks, global trade tensions, and growing anxieties over the deteriorating fiscal health of major economies.
Spot gold rose 1.7% to $4,134.48 an ounce by late afternoon in New York. The Bloomberg Dollar Spot Index held steady. Silver, platinum, and palladium also moved higher.
Across industrial metals, copper futures on the London Metal Exchange finished nearly unchanged at $10,773 per metric ton, while most other base metals posted modest gains.
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