Gold Advances Amid Intensifying Rate Cut Expectations

(RTTNews) - Gold prices edge higher on Monday amid reinforced U.S. Federal Reserve rate cut expectations based on recent economic data along with reports indicating a "pro rate-cut" economist is line to succeed the current U.S. Federal Reserve Chair.

Front Month Comex Gold for December delivery climbed by $21.00 (or 0.50%) to $4,239.30 per troy ounce.

Front Month Comex Silver for December delivery skyrocketed by $1.9720 (or 3.49%) to $58.418 per troy ounce. Notably, this is a new record high for silver prices, which have increased for five consecutive sessions.

Current U.S. Federal Reserve Chair Jerome Powell's term ends in mid-May 2026.

U.S. President Donald Trump has been overtly critical of Powell not lowering interest rates enough.

Treasury Secretary Scott Bessent, who recommends names to the president, recently stated that he would send the candidate's profile to the president before Christmas.

Last night, on Air Force One, Trump stated that he has already chosen the successor but stopped short of naming his choice.

Reports from last week hinted that Kevin Hassett, Chairman of the National Economic Counsel, is the frontrunner among others.

Aligning with Trump's views on economy, Hassett has also long called for lowering interest rates. He recently stated that if he were the Fed Chair, he would be cutting rates right away as he felt that the data suggests that path.

Markets are already pricing in Hassett as the nominee, and this added pressure on the U.S. dollar.

The dollar index is currently trading at 99.26, lower than the previous session by 0.19%.

As lower interest rates act as a tailwind for riskier assets and help foreign buyers purchase the yellow metal more easily, gold prices received support.

Currently, the CME Group's FedWatch Tool is indicating that investors are betting on an 87.6% chance of a quarter-basis-point rate cut at the Federal Reserve's upcoming December 9-10 meeting.

On the economic front, the state of U.S. manufacturing against the backdrop of the recent U.S. government shutdown and the ongoing tariff war is revealed through S&P Global's manufacturing PMI and the Institute for Supply Management's reports.

Today, the S&P Global manufacturing purchasing managers' index read 52.2 for November, up slightly from a preliminary estimate of 51.9 but down from October's reading of 52.5.

The ISM manufacturing PMI declined to 48.2 in November (the lowest in four months) compared to 48.7 in October. This reveals that the manufacturing sector has contracted for the ninth consecutive month.

The Trump administration is pushing the pedal hard to compel Russia to halt its war against Ukraine.

After Ukraine President Volodymyr Zelenskyy gave a nod to the peace plan proposed by the Trump administration, U.S. envoy Steve Witkoff is meeting Russian President Vladimir Putin tomorrow to discuss the agreement.

Meanwhile, U.S. officials met with their Ukrainian counterparts in Florida to explain the security guarantees that Ukraine would receive as part of the plan. Remarks by the U.S. officials after the meeting signaled positivity.

Despite U.S. speeding up the process to halt the war, gold retained its safe-haven demand as investors are still skeptical about Russia's intention to halt the war.