Gold Advances As Expectations Of Fed Rate Cut Firm

(RTTNews) - Despite the U.S. dollar gaining ground, gold prices edged higher on Monday amid increasing expectations of a U.S. Federal Reserve interest rate cut next month.

Front Month Comex Gold for November delivery rose by $15.20 (or 0.37%) to $4,091.90 per troy ounce.

Front Month Comex Silver for November delivery jumped by 42.20 cents (or 0.85%) to $50.295 per troy ounce.

On October 29, the U.S. Federal Reserve instituted a quarter-point rate cut.

While announcing the rate cut, U.S. Federal Chair Jerome Powell cautioned that another rate cut in December is "not a foregone conclusion."

Since then, several Fed officials have been expressing divergent views on another cut this year.

The steady flow of economic data after the end of the U.S. government shutdown weeks before has indicated a cooling labor market though with variations in the private data and official releases.

Last Friday, John Williams, President and Chief Executive Officer of the Federal Reserve Bank of New York, indicated he expects the central bank to lower the interest rate due to the ongoing labor market weakness and stressed that "there is room for further adjustment."

Today, Federal Reserve Governor Christopher Waller also said he is in favor of an interest rate cut in December due to concerns about the labor market. Waller expects a meeting-by-meeting approach starting in January, when the U.S. central bank would start receiving a flurry of economic data.

Dovish comments from Fed officials have reaffirmed investors' expectations for another rate cut by next month

CME Group FedWatch tool is currently indicating that traders are betting on a 77.1% chance of a 25 basis point rate cut by the Fed at its December 9-10 meeting.

The U.S. dollar index was last trading at 100.21, up by 0.03%.

On the geopolitical front, mirroring the Gaza Peace Plan which has been so far successful, U.S. President Donald Trump's administration came up with a similar plan to end the drawn-out Russia-Ukraine war.

Earlier reports indicated that Trump's proposed agreement compelled Ukraine to make a lot of concessions, including ceding some territories to Russia. These tenets were not welcomed by Ukrainian President Volodymyr Zelenskyy as well as some European nations.

Yesterday, the U.S. and Ukraine announced that they are up with an "updated and refined peace framework" though neither country divulged any specific details. Their joint statements made in Geneva, Switzerland also reaffirmed their preparedness to work to "secure a peace that ensures Ukraine's security, stability, and reconstruction."

Investors are cheering these developments, as an end to the Russia-Ukraine war could lessen the uncertainty in the global economy to a large extent.

Trump also announced today that he had a telephone call with Chinese President Xi Jinping and added that he has accepted a invitation by Xi to visit China in April. Trade talks between both the nations are now progressing more smoothly after some recent disagreements.

In a separate report, the central banks of major nations have not ended their gold buying spree indicating a potential demand for the yellow metal.

In particular, China added another 15 tonnes of gold in September, bringing its reserves to around 2,304 tonnes.

Meanwhile, Trump today stated that the "full benefit" of his policies would bring "unprecedented" wealth to the U.S.

However, markets are concerned about the outcome of the Supreme Court case over Trump's tariffs. If tariffs are rolled back after a judgment against Trump's administration, billions of dollars would have to be returned to several countries by the U.S. which could devastate the economy.

The prevailing uncertainty in the global economic scenario is supporting the precious metal.

In its "Year Ahead" outlook, the Bank of America stated that it expects gold momentum to cascade into 2026, citing intact macroeconomic condition.