Gold drifts higher on US rate cut expectations

[BENGALURU] Gold prices nudged higher during early Asian trade on Wednesday (Nov 26), driven by optimism over a possible December interest rate cut by the US Federal Reserve.

Spot gold was up 0.2 per cent at US$4,136.59 per ounce, as at 8.54 GMT. US gold futures for December delivery fell 0.1 per cent to US$4,134.00 per ounce.

Markets are pricing in an 84 per cent chance of a Fed rate cut next month, compared to 50 per cent last week, according to CME Group data.

Data on Tuesday showed that US retail sales increased less than expected in September. A separate report showed that, in the 12 months through September, the Producer Price Index increased 2.7 per cent after advancing by the same margin in August.

The data came on the heels of recent dovish remarks from Fed policymakers, reinforcing expectations for a rate cut.

Meanwhile, US Treasury Secretary Scott Bessent said on Tuesday the Fed’s system of managing interest rates is struggling and needs to be simplified.

Gold, a non-yielding asset, tends to perform well in a low-interest-rate environment and during periods of geopolitical uncertainty.

On the geopolitical front, a negative factor for prices was President Volodymyr Zelensky’s statement that Ukraine was ready to advance a US-backed framework to end the war with Russia and discuss disputed points with US President Donald Trump in talks he said should include European allies.

The US weekly jobless claims report is scheduled for release later on Wednesday.

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Gold holds steady as rising US rate-cut bets offset dollar strength

Top consumer China’s net gold imports via Hong Kong in October fell about 64 per cent from September, data showed.

Among other metals, spot silver slipped 0.1 per cent to US$51.36 per ounce, platinum lost 1 per cent to US$1,538.00, and palladium lost 1.1 per cent to US$1,382.24. REUTERS