Gold experienced a significant price increase, reaching its highest point since mid-November. This surge is attributed to weakening US economic data, which has fueled speculation about an upcoming interest rate cut by the Federal Reserve in December. The increased probability of a rate cut has bolstered investor confidence in gold, traditionally seen as a safe-haven asset during times of economic uncertainty.
- Gold climbed to $4,150 per ounce.
- US retail sales rose only 0.2% in September, below expectations.
- Private employers shed an average of 13,500 jobs per week.
- Producer price figures indicate inflation pressures are consistent with expectations.
- Fed Governor Christopher Waller voiced support for a December rate cut.
- Markets assign over 80% probability to a 25-basis-point cut next month.
The recent movement in the asset’s price suggests a strong inverse correlation with expectations regarding interest rate policy. Weaker economic indicators lead to increased anticipation of monetary easing, which in turn drives investment into the asset. The convergence of economic data and central bank commentary seems to be creating a favorable environment for further appreciation.