Gold rises more than 1% on Fed rate-cut bets, slowdown worries

Gold prices rose more than 1% on Monday, buoyed by expectations of another Federal Reserve interest rate cut in December and a slew of weak economic data that raised global slowdown worries.

Spot gold gained 1.4% to $4,053.40 per ounce by 0435 GMT.

US gold futures for December delivery rose 1.3% to $4,062.40 per ounce.

“Gold is catching a solid bid from traders to kick off the week, with the precious metal rising on anticipation that a rate cut could still arrive next month, even though the Fed has been downplaying the chances of it occurring,” KCM Trade Chief Market Analyst Tim Waterer said.

The US economy shed jobs in October amid losses in the government and retail sectors, while cost-cutting and artificial intelligence adoption by businesses led to a surge in announced layoffs, data showed last week.

US consumer sentiment weakened to the lowest level in nearly 3-1/2 years in early November amid worries about the economic fallout from the longest ever government shutdown, a survey showed on Friday.

Market participants now see a 67% chance of a December rate cut, according to the CME FedWatch Tool. Non-yielding gold tends to do well in a low-interest-rate environment and during economic uncertainties.

On Sunday, the US Senate appeared poised to move forward with a measure aimed at reopening the federal government and ending a 40-day shutdown that has sidelined federal workers, delayed food aid and snarled air travel.

“While it looks like we could be moving towards an end to the shutdown, with this comes greater visibility over key economic indicators, which have been short on the ground since the shutdown commenced,” Waterer said.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.16% to 1,042.06 metric tons on Friday from 1,040.35 tons on Thursday.

Elsewhere, spot silver firmed 1.8% to $49.18 per ounce, platinum rose 1.3% to $1,565.36 and palladium added 0.7% to $1,389.94.