“Gold prices fall to a weekly low amid reduced expectations of a Fed rate cutGold prices fell to their lowest level in more than a week as markets scaled back expectations of a US Federal Reserve interest rate cut next month. Spot gold fell 0.1% to $4041.54 an ounce, while gold futures for December delivery fell 0.8% to $4040.30 an ounce.
”, — write: unn.ua
DetailsSpot gold prices fell 0.1% to $4041.54 per ounce at 10:27 GMT (12:27 Kyiv time) after reaching a low since November 10 earlier in the session. US gold futures for December delivery fell 0.8% to $4040.30 per ounce.
“Market participants are pricing in US interest rate cuts after more hawkish comments from Fed officials,” said UBS analyst Giovanni Staunovo.
“I expect gold prices to bottom out soon, as I still see the Fed cutting rates several times over the next quarters, and central bank diversification into gold remains strong,” he added.
Markets lowered their bets on a Fed rate cut next month to just over 46%, compared to 67% last week, as shown by the CME FedWatch tool.
The longest US government shutdown, which ended last week, halted the release of official economic data, leaving policymakers and traders in the dark ahead of the Fed’s policy meeting next month.
Traders had hoped that the resumption of official data releases would confirm the need for a rate cut in December, but those hopes faded as more Fed officials began to express caution last week.
Fed Vice Chair Philip Jefferson said on Monday that the US central bank needs to “move slowly” with further rate cuts.
Non-yielding gold typically performs well in low-interest-rate environments and during periods of economic uncertainty.
Investors will await the release of the minutes from the latest Fed meeting on Wednesday and non-farm payrolls data for September, due to be released on Thursday, for further clues.
“We continue to see a favorable fundamental backdrop for gold in the long term. The US economy continues to slow, US interest rates are expected to fall, and as a result, the US dollar should weaken,” said Julius Baer analyst Carsten Menke.
Spot silver prices rose 0.4% to $50.38 per ounce, platinum rose 0.3% to $1537.55, and palladium rose 0.6% to $1400.69.
RecallAccording to fintech expert and co-founder of Concord Fintech Solutions Olena Sosedka, the upward trend in gold prices is reinforced by the unstable geopolitical situation in the world.
“Wars, trade conflicts, unpredictable decisions of world leaders – all this creates an atmosphere of constant instability, in which gold becomes a universal insurance. So, the jump in the value of gold is not just a financial event, it is a marker of investors’ confidence in the modern economy. And for the fintech market, this is a clear signal: technology can make finance more convenient, but the basis of trust is always built on simple and understandable values,” summarized Olena Sosedka.
She noted that the current rise in gold prices is just the tip of the iceberg, as at a global level it indicates investors’ preparation for a weakening dollar. The depreciation of the American currency makes gold more accessible to buyers in international markets, which, in turn, increases demand and stimulates further price growth.
The main drivers of stable demand for gold remain central banks, primarily China and Russia. They are actively increasing their gold reserves, effectively implementing a de-dollarization strategy and demonstrating a desire to reduce dependence on the American currency.