Gold prices edged higher on Wednesday, supported by a weakening dollar and growing expectations that the Federal Reserve will deliver an interest rate cut at next week’s policy meeting. The move kept the precious metal near multi-week highs as traders leaned into a more dovish U.S. monetary outlook.
Gold climbs as markets bet heavily on a rate cut
By 08:40 ET (13:40 GMT), spot gold was up 0.4% at $4,221.17 per ounce, while U.S. gold futures gained 0.8% to $4,252.90. Earlier this week, the metal touched a six-week peak of $4,264.29, extending its strong year-end momentum.
With CME’s FedWatch tool showing a roughly 90% chance of a December 9–10 rate cut, investors accelerated flows into safe-haven assets. A softening dollar, now trading near its weakest point since mid-November, further boosted gold by making it more affordable for international buyers.
Economic softness nudges Fed toward easing
Recent U.S. data has pointed to cooling inflation and slower demand, strengthening the argument for policy easing. Traders are now awaiting Friday’s delayed September PCE inflation report, the Fed’s preferred gauge, for confirmation. Any dovish surprise could push gold even higher heading into the meeting.
Speculation grows over possible Fed leadership change
Adding another layer to the market narrative, reports suggest that Kevin Hassett, a White House economic adviser who has publicly favored lower rates, is emerging as a leading candidate to replace Jerome Powell.
Such a leadership shift would signal a more accommodative stance in 2025, feeding bullish sentiment for gold, which tends to thrive when borrowing costs fall and real yields compress.
Central banks lift global demand with the strongest buying in nearly a year
Fresh data from the World Gold Council revealed that central banks added a net 53 tonnes to reserves in October, a 36% jump from September and the largest monthly addition since November 2024.
Poland led October buying with 16 tonnes, lifting its annual total to 83 tonnes and pushing its holdings to 531 tonnes, or 26% of its reserve base. Brazil matched Poland’s October purchase, adding 16 tonnes for the second month in a row.
China also continued steady accumulation, marking its 12th straight month of additions, though at a modest 0.9 tonnes. Russia was the lone seller, trimming 3 tonnes in October.
Industrial metals mixed as traders await clarity
The broader metals complex traded in narrow ranges while markets awaited the Fed. Silver futures rose 1.1% to $59.345 per ounce, sitting just below their record high of $59.65. Platinum futures dipped 1.7% to $1,655.
Copper prices strengthened, mirroring improved risk appetite. London Metal Exchange copper climbed 2.3% to $11,445 per ton, while U.S. copper futures gained 2.8% to $5.3890 per pound.
Gold enters the week with solid footing, backed by a softer dollar, heavy central bank buying, and strong expectations of a policy shift. For now, all eyes remain on Friday’s PCE print and the Fed’s decision, both of which could shape the next major leg of the rally.
