The dollar drifted near its weakest level in a month—lows last seen on December 4—providing an added tailwind for bullion by making it more affordable for non-U.S. buyers. Market sentiment firmed after the latest core PCE inflation reading offered no surprises, reinforcing expectations that the Fed is comfortable moving toward monetary easing.
Tim Waterer, Chief Market Analyst at KCM Trade, noted that the PCE data “came and went without incident,” leaving rate-cut expectations intact. “A softer dollar is keeping pressure off gold, and the prospect of looser monetary conditions is allowing the metal to edge higher,” he added.
Recent U.S. economic indicators have painted a picture of cooling momentum. Consumer spending decelerated in September after three months of robust growth, reflecting strain from a weaker labour market and the rising cost of living. A separate private-sector payrolls report showed the steepest decline in more than two and a half years, further nudging investors toward the view that the economy may benefit from policy support. Dovish remarks from several Fed officials have amplified these expectations.
According to CME’s FedWatch tool, markets are now pricing in an approximately 88% probability of a 25-basis-point cut this week—a shift that typically favours non-yielding assets such as gold.
Silver Retreats Slightly After Record High
Silver eased 0.4% to $58.05 per ounce, pulling back after hitting a new all-time high of $59.32 on Friday. Even so, the metal has more than doubled in value this year. Analysts point to strong industrial demand, ongoing supply concerns, and the perception that silver remains undervalued relative to gold as key drivers behind its remarkable 2025 rally.
Waterer emphasized that silver’s momentum reflects a broader structural story: demand is expected to outpace supply at least through 2026, particularly with growth in solar manufacturing and other high-tech applications.
Platinum Group Metals Trend Higher
In other precious metals, platinum climbed 1.4% to $1,664.20, while palladium advanced 0.8% to $1,468.26, adding to a generally firm tone across the sector as investors position themselves ahead of the Fed decision.