Gold rose for the fourth straight session on Wednesday, supported by a weakening dollar and expectations that the restart of U.S. government activities, along with upcoming economic data, will enhance hopes for an interest rate cut by the Federal Reserve next month. Spot gold rose by 0.4% to $4,142.70 per ounce as of 0012, reaching a peak not observed since October 23 on Tuesday. U.S. gold futures for December delivery rose by 0.8%, hitting a price of $4,149.20 per ounce. On Monday, the U.S. Senate passed a measure to restore federal funding after an unprecedented shutdown that negatively impacted food assistance for millions, left hundreds of thousands of federal employees without pay, disrupted air traffic significantly, and delayed the release of government economic statistics.
The agreement is pending ratification in the House of Representatives, with Speaker Mike Johnson expressing a wish for a vote potentially on Wednesday. The legislation will then be submitted to U.S. President Donald Trump for his signature, officially making it law. Market participants are now estimating about a 68% chance that the U.S. central bank will enact a 25 basis point rate cut next month, up from the 64% noted in the previous session, according to the reports.
Gold that does not generate income usually does well in situations marked by low interest rates and times of economic instability. The dollar index has been on a downward trend for the fifth straight session, making gold more attractive to those holding other currencies. On Monday, Fed Governor Stephen Miran indicated that a 50-bps rate cut would be appropriate for December, pointing out the decrease in inflation and the slow rise in the unemployment rate.
SPDR Gold Trust, the largest gold-backed exchange-traded fund globally, announced a 0.41% increase in its holdings, climbing to 1,046.36 metric tons on Tuesday from 1,042.06 tons on Monday. Elsewhere, spot silver increased by 0.1% to $51.29 per ounce, platinum declined by 0.1% to $1,583.10, while palladium remained unchanged at $1,443.56.