Gold gains as dollar weakens, market eyes possible US rate cut
Gold advanced as the US dollar weakened and expectations grew for a possible Fed interest-rate cut before year-end.
Bullion traded near $4,165 an ounce in Asian markets, after ending Tuesday largely unchanged. The dollar’s decline makes gold cheaper for many buyers, News.Az reports, citing Bloomberg.
Recent economic data strengthened bets that the Federal Reserve could lower rates next month. A modest increase in September retail sales indicated that several months of strong spending have slowed, while consumer confidence fell to its lowest level since April.
Reinforcing prospects for lower rates, the likely frontrunner to be the next Fed chair – White House National Economic Council Director Kevin Hassett – is seen as someone who shares President Donald Trump’s support for cutting borrowing cost. Gold typically benefits when rates are low, as it doesn’t pay interest. Swaps traders are now seeing a more-than-80% chance of a quarter-point cut in December.
The Fed’s next decision has become “the ultimate Pandora’s box for risk this year, and likely into 2026,” said Hebe Chen, an analyst at Vantage Markets in Melbourne. “With no solid economic glue holding expectations together, any optimism stays fragile — and the latest swings in equities and crypto show just how quickly sentiment can flip,” she said.
Gold has consolidated above the $4,000-an-ounce threshold after retreating from last month’s peak above $4,380 an ounce. The metal — still on track for its best annual performance since 1979 — has risen more than 55% this year, boosted by central-bank purchases and strong retail on the back of the so-called debasement trade where investors avoid sovereign debt and currencies.
Spot gold rose 0.8% to $4,164.30 an ounce as of 10:56 a.m. Singapore time. The Bloomberg Dollar Spot Index dipped 0.2% after falling 0.3% on Tuesday. Silver advanced 0.9%, while platinum and palladium edged lower.
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