Phnom Penh, Nov. 11 – Gold prices (XAU/USD) continued their advance on Tuesday, reaching their highest level in nearly three weeks, fueled by increasing speculation that the U.S. Federal Reserve will implement another interest rate cut in December.
The precious metal maintained modest intraday gains during the European session, trading just below the near three-week peak hit earlier today. A primary driver supporting the safe-haven asset is ongoing concern over the potential economic impact of the longest-ever U.S. government shutdown. This, combined with strong bets on a December rate cut by the Fed, continues to provide a significant boost to the non-yielding yellow metal.
Market Dynamics and Price Action
While market sentiment has been somewhat improved by positive developments suggesting a reopening of the U.S. government, and the U.S. Dollar (USD) saw a modest uptick, these factors have only served to temper, not reverse, gold’s rally. The emergence of some USD buying prevented traders from placing overly aggressive bullish bets on XAU/USD, particularly amid thin trading volumes due to a bank holiday in the U.S.
However, the prevailing dovish expectations for the Federal Reserve are widely anticipated to limit any substantial USD gains, indicating that the path of least resistance for the gold price remains upward.
Commodity Benchmarks
According to Reuters, spot gold was up 0.7$ at $4,142.72 per ounce as of 0458 GMT, marking its highest price point since October 23.
Similarly, U.S. gold futures for December delivery also rose 0.7% to $4,148.80 per ounce.
Other precious metals also saw gains:
- Spot silver climbed 0.8% to $50.94 per ounce.
- Platinum rose 0.4% to $1,584.40.
- Palladium saw the largest percentage increase, jumping 1.4% to $1,435.43.