Gold prices dipped modestly in Asian trading on Thursday, easing back after a strong upswing earlier in the week as confidence grew that the U.S. Federal Reserve is poised to lower interest rates in December.
Expectations for more accommodative U.S. policy were also buoyed by rising speculation about a dovish successor to Fed Chair Jerome Powell, along with a series of soft economic indicators pointing to weakening momentum in the American economy.
The dollar weakened on these expectations, providing broader support to precious metals over the week. Silver outperformed sharply, moving back toward record levels, while platinum also posted notable gains on Thursday.
Spot gold slipped 0.3% to $4,152.35 per ounce by 00:08 ET (05:08 GMT), while gold futures declined 0.4% to $4,184.15 per ounce.
Rate-Cut Hopes and Safe-Haven Interest Lift Gold
Despite Thursday’s pullback, spot gold remained more than 2% higher for the week, with prices rising as traders increased their bets on a rate cut at next month’s Fed meeting.
According to CME’s FedWatch tool, markets are now assigning a 79.8% probability of a 25-basis-point cut at the December 9–10 policy meeting, a substantial jump from the 24% likelihood priced in just a week earlier.
The shift followed comments from two Federal Reserve officials signaling support for a December rate reduction. Disappointing U.S. data releases further reinforced expectations that the central bank may need to act to prevent deeper economic weakness.
Safe-haven demand also played a role. Signs of only limited progress on a U.S.-brokered ceasefire between Russia and Ukraine, alongside rising geopolitical friction between Japan and China, added to gold’s appeal.
Silver and platinum traded mixed on Thursday, following gold’s slight decline. Spot silver slipped 0.7% to $52.9525 per ounce after nearing record highs earlier in the week. Platinum, meanwhile, surged 1.7% to $1,616.76 per ounce, though the catalyst behind the jump remained unclear.
Lower interest rates typically increase the attractiveness of non-yielding assets like gold, as investors tend to shift away from government bonds when yields fall.
Focus Shifts to Fed Chair Succession
Bloomberg reported this week that White House National Economic Council Director Kevin Hassett has emerged as the leading candidate to succeed Powell when his term expires in May 2026.
Hassett, viewed as a close ally of President Donald Trump, is widely expected to support the president’s push for sharply lower interest rates—potentially more aggressively than Powell.
As ANZ analysts noted, “The White House National Economic Council Director is seen as a close ally of the US President and would likely be perceived as someone who would bring the president’s approach to interest-rate cutting to the Fed.”
Trump has repeatedly urged the central bank to slash interest rates to stimulate the U.S. economy, though the Fed has resisted such calls due to concerns over lingering inflation.
However, several Fed policymakers recently suggested that stabilizing the labor market now outweighs the risks posed by sticky price pressures, and that inflation is likely to ease in the coming months.
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