Gold prices advanced sharply on Wednesday, rising more than 1% and approaching a two-week high as fresh U.S. economic data strengthened bets that the Federal Reserve could cut interest rates at its upcoming meeting. Spot gold traded around $4,172 per ounce, its highest level since mid-November, while U.S. December gold futures rose to $4,168 per ounce.
The move reflects renewed appetite for non-yielding safe-haven assets at a time when investors are increasingly confident that slowing economic momentum will prompt the Fed to begin easing as early as next month. Lower interest rates tend to weaken the U.S. dollar and reduce the opportunity cost of holding gold, supporting higher prices.
Why Gold Is Climbing
Market participants interpreted the latest flow of U.S. data – including moderating output indicators and easing labor-market signals – as another sign the economy is cooling without slipping into recession. This combination has bolstered expectations for a rate cut, which in turn has revived momentum across the precious-metals complex.
Traders also pointed to steady physical demand in Asia and lingering geopolitical risks as additional factors underpinning bullion’s resilience. Even with recent price volatility, gold has remained elevated near record levels for much of the quarter.
What Investors Are Watching Next
As mentioned, the focus now turns to upcoming U.S. inflation data and commentary from Fed officials, both of which could either reinforce or challenge the market’s current expectations. Key questions include:
- Whether incoming data supports a December rate cut.
- If the dollar retreats further, providing additional support to gold.
- How physical demand trends evolve in China and India, two major buyers.
For now, traders say the path of least resistance appears tilted upward, with rate-cut optimism keeping gold well-bid as the year draws to a close.
