Gold surges to a two-week high amid weak US data, Fed cut

By Al Mayadeen English
Source: Agencies
Today 17:08

Gold prices surge 2% to a two-week high as weak US data boosts expectations for a Fed rate cut.

Listen

A 12.441 kg gold bar sits amongst one-kilogram gold cast bars with 99.99% purity ready for sale at the ABC Refinery in Sydney, Australia, on April 30, 2025 (AP)

Gold prices climbed sharply on Monday, hitting their highest level in two weeks, as weak US economic data strengthened expectations that the Federal Reserve could cut interest rates next month. A weaker dollar and growing safe-haven demand amid political and trade tensions further fueled the rally.

By 11:38 GMT, spot gold had surged 2.1% to $4,082.17 per ounce, its highest level since October 27, while US gold futures for December delivery rose 2% to $4,090.50. The dollar index slipped 0.1%, making gold more attractive to non-US buyers.

“There are concerns regarding the US economy because of the weak data, and the main focus remains on the dollar index,” said Jigar Trivedi, senior research analyst at Reliance Securities.

He added that safe-haven buying has risen due to the persisting trade war and geopolitical tensions, providing additional support to bullion.

US job loss, government lockdown

Recent data showed the US economy suffered job losses in October, particularly in the government and retail sectors. In addition, consumer sentiment fell to its lowest level in nearly three and a half years in early November, weighed down by anxiety over the economic toll of the longest-ever US government shutdown.

The US Senate advanced a measure on Sunday to reopen the government and end the 40-day shutdown that has left thousands of federal workers sidelined. However, White House economic advisor Kevin Hassett warned that economic growth could turn negative in the fourth quarter if the shutdown drags on.

Market traders now assign a 65% probability to a Fed rate cut in December, which could further bolster non-yielding assets like gold.

“While we maintain that gold could approach $5,000 within the next 12 months and silver $65, we are more cautious about calling for an immediate return to the highs,” Saxo Bank said in a note.

Other precious metals also advanced, with silver jumping 3.4% to $49.95 per ounce, platinum rising 1.7% to $1,571.10, and palladium gaining 2.2% to $1,410.48.