Gold Markets Eye U.S. Economic Signals
Spot gold was steady at $4,207.60 per ounce at 0856 GMT, following a more than 1% decline in the previous session. U.S. gold futures for December delivery rose 0.4% to $4,237.90 per ounce.
Ole Hansen, Head of Commodity Strategy at Saxo Bank, noted that gold was trading cautiously in early European hours:
“(Gold) trades unchanged, with attention on key U.S. data that could cement expectations for a metal-supportive December rate cut.”
Investors are closely watching the U.S. November ADP employment figures, scheduled for release at 1315 GMT, and the September Personal Consumption Expenditures (PCE) Index, delayed due to the recent U.S. government shutdown and set to be released on Friday.
Rate Cut Expectations Support Precious Metals
Weaker U.S. economic data and dovish signals from Federal Reserve officials have heightened expectations of a rate cut at the Fed’s December 9–10 meeting, with brokerages including Bank of America and J.P. Morgan projecting policy easing.
U.S. rate futures currently price in an 87% chance of a rate cut next week, according to CME’s FedWatch tool. Gold, being a non-yielding asset, typically benefits in a low-interest-rate environment, which has contributed to its steady performance.
Silver Pulls Back After Record High
Silver, which combines both precious and industrial metal demand, slipped 0.5% to $58.15 per ounce after reaching a record high of $58.94 earlier in the session.
Hansen highlighted the factors supporting silver:
“A tight supply outlook, continued momentum buying, and short covering following last Friday’s breakout above $54.50.”
However, he warned that overbought conditions could pose a near-term risk for silver bulls. Silver has surged 101% this year, aided by its inclusion on the U.S. list of critical minerals, while gold has gained 60% year-to-date.
Other Precious Metals and Market Overview
Elsewhere, platinum gained 0.6% to $1,647.75, while palladium declined 0.5% to $1,455.34.
Global equities were steadier on Wednesday, buoyed by a rebound on Wall Street following a brief selloff in bond markets and cryptocurrencies, reflecting cautious optimism among investors.