Gold poised for fourth monthly gain on Fed rate cut optimism

NEW YORK: Gold prices rose on Friday to a two-week high and were on track for a fourth straight monthly rise on optimism over a possible US Federal Reserve rate cut in December.

Meanwhile, an outage at CME Group stopped trade on its currency platform and in futures spanning foreign exchange, commodities, Treasuries and stocks.

US gold futures for December delivery were at USD4,221.30 per ounce ahead of the outage. Spot gold rose 0.4percent to USD4,174.15 per ounce by 1140 GMT, its highest since November 14, and was set for a 2.7 percent weekly gain. Bullion is set to register a 3.9 percent rise this month.

“The underlying sentiment (in gold) remains very positive... There are concerns about global debt, tariffs and sanctions” while ongoing central bank buying has also been driving gold’s rally this year, said independent analyst Ross Norman.

Gold, a non-yielding asset, tends to do well in low-interest rate environments. Traders are now pricing in an 85 percent chance of a rate cut in December, up from 50percent a week earlier.

Comments from heavyweights like Fed Governor Christopher Waller and New York Fed President John Williams, as well as the release of soft US economic data after the government shutdown, have reinforced expectations that the central bank will trim interest rates next month.

The US dollar was headed for its worst week since late July. A weaker greenback makes dollar-priced gold more attractive for buyers using other currencies.

Elsewhere, UBS raised its silver price forecast by USD5 to USD8/oz and said it expects the metal to trade at USD60/oz in 2026. Spot silver rose 0.8 percent to USD53.86 per ounce and platinum gained 2.3 percent to USD1,645.60, with silver up 7.7 percent and platinum 8.8 percent for the week, respectively. Palladium gained 2.6percent to USD1,478.76 and was set for a 7.6 percent weekly gain.