Gold maintained its trading near a six week high at the start of the week, supported by dollar weakness and growing bets on the beginning of a U.S. rate-cut cycle at the upcoming Federal Reserve meeting this month. Spot prices moved above the $4,240 per ounce zone after breaking last week’s highs, while February contracts reinforced the upward momentum as they approached $4,275. The recent gains extend an advance of more than 4% last week, reflecting a clear shift in investor appetite toward defensive assets.
The continued decline in the U.S. dollar index near its lowest level in two weeks helped boost the appeal of gold to non-U.S. currency holders, alongside a broader tendency toward risk reduction in financial markets. Derivatives pricing signals strong odds of a 25-basis-point rate cut in December, following a series of weak U.S. economic data and easing inflation indicators. Although this trend supports precious metals, the lack of fresh data following the government shutdown period, along with mixed policy signals, has kept markets cautious.
The dollar opened monthly trading with notable weakness, as markets enter a sensitive phase marked by expectations of a U.S. rate cut and anticipation of the candidate to replace Jerome Powell as Fed Chair. This combination forces traders to re-price risk across the board, especially after the turbulence caused by last week’s CME trading outage, which disrupted multiple asset classes.
In the United States, momentum has been building for a 25-basis-point rate cut at the December meeting, with markets pricing the probability at roughly 87%. This shift was not solely driven by economic data; its momentum increased as Kevin Hassett emerged as the leading contender for the Fed Chair position. Treasury Secretary Scott Bessent hinted that the announcement could come before Christmas, adding another layer of uncertainty to 2026 expectations.
The monetary landscape became even more sensitive after President Donald Trump stated that he has selected his nominee for Fed Chair but declined to reveal the name. The statement reopened speculation around figures such as Kevin Hassett, Kevin Warsh, and Christopher Waller. The selection of the next Fed Chair will not only influence the December decision but could reshape the trajectory of monetary policy in 2026, affecting both the pace and depth of rate cuts.
Silver posted notable moves after reaching a new record level before stabilizing above $56 per ounce, while platinum saw modest gains. Copper, in contrast, continued to trade within a narrow range near $11,200 per metric ton, pressured by Chinese data showing continued industrial contraction for the eighth consecutive month adding further weight on base metals compared to precious metals.
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