Spot gold increased by 1% to reach a two-week high on Friday, driven by expectations that the U.S. Federal Reserve will reduce interest rates next month, thereby enhancing demand for the non-yielding asset. Meanwhile, silver achieved a new record high. Spot gold experienced an increase of 1.3%, reaching $4,210.94 per ounce by 03:11 p.m., following a peak price not seen since November 13 earlier in the day. Bullion is poised to achieve a 3.6% gain for the week and a 5.2% increase for the month, marking a fourth consecutive monthly rise. Silver reached a new peak of $56.78 per ounce, reflecting an increase of 6.1% for the session and 16.6% for the month. Futures trading recommenced at approximately 8:30 a.m., following a prolonged interruption at CME Group that suspended transactions on its currency platform as well as in futures related to foreign exchange, commodities, Treasuries, and equities.
U.S. gold futures for February delivery concluded the session with a 1.3% increase, reaching a price of $4,254.9 per ounce. Investors are concentrating their attention on the Federal Reserve. “The expectation is that we will continue to experience a slower economy leading into 2026, and it is highly probable that the Federal Reserve will implement rate cuts, which is drawing some investors back into gold,” stated Bart Melek. Gold typically performs favorably in environments characterized by low interest rates. Recent dovish remarks from Fed Governor Christopher Waller and New York Fed President John Williams, along with softer economic data following the recent U.S. government shutdown, have bolstered expectations that the central bank will implement rate cuts next month.
Market participants now assign an 87% probability to a rate cut in December, a significant increase from the 50% likelihood observed just a week prior. Meanwhile, “the technical charts for silver have turned more bullish in the past week or so, and that’s inviting the chart-based speculators to the long side of the silver market,” stated Jim Wyckoff. Gold demand exhibited a lackluster performance in key Asian markets this week, as elevated prices constrained retail purchasing, even with the onset of India’s wedding season.
The elimination of a tax exemption on gold purchases in China has negatively impacted consumer demand. Platinum increased by 4% to $1,672.50, marking a 10.7% rise for the week, whereas palladium rose by 0.8% to $1,450.16, positioning itself for a 5.6% weekly gain.