Gold extended its gains in Tuesday’s Asian session, supported by growing conviction that the Federal Reserve is preparing to cut interest rates again next month.
Investors also shifted toward safe-haven assets ahead of several influential U.S. economic releases, helping gold rise even as the dollar held firm.
Spot gold was up 0.3% at $4,145.57 per ounce, while February futures gained 0.2% to $4,180.0/oz.
Dovish Fed commentary fuels momentum
Rate-cut speculation has surged after two Fed officials suggested they would back another reduction in December. Market pricing now reflects a strong likelihood of a 25-basis-point move, according to the CME FedWatch tool.
Lower borrowing costs tend to support gold by making yield-bearing assets less attractive. The metal has already logged several record highs this year after the Fed cut rates at consecutive meetings.
Geopolitical tensions—particularly between China and Japan—and worries about rising fiscal deficits across advanced economies have also lifted demand for safe stores of value.
Platinum, silver, and copper all moved higher, with copper futures on the LME climbing 1.2% to $10,887 per tonne.
Traders await final data set before December Fed meeting
Metal markets saw subdued price action as traders waited for a series of U.S. data releases that will shape expectations heading into the Fed’s final meeting of the year.
Although the numbers reflect September activity, they will likely be the newest data available to Fed officials.
Tuesday brings PPI and retail sales reports, followed by Wednesday’s PCE inflation reading.
With the prolonged government shutdown preventing the publication of October payroll and inflation figures, the Fed will effectively head into December with limited visibility—one reason markets had previously expected a potential pause.
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