Gold Extends Rally, Hits Highest Level in Over Three Weeks
Standard Chartered noted that gold’s correlation with major macro drivers — including the dollar and real yields — has weakened.
Quick overview
- Gold reached its highest level in over three weeks, driven by expectations of a Federal Reserve rate cut next month.
- Concerns over rising U.S. debt and labor-market weakness have intensified following the end of the government shutdown.
- Spot gold increased by 0.2% to $4,206.64 per ounce, while U.S. gold futures dipped slightly.
- A majority of economists anticipate a 25 basis point rate cut at the Fed's upcoming meeting, which typically supports gold prices.
Gold climbed to its highest level in more than three weeks on Thursday, driven by expectations that newly released economic data — following the end of the U.S. government shutdown — will strengthen the case for a Federal Reserve rate cut next month.
The reopening has revived fears over rising U.S. debt and broader macroeconomic deterioration, while the private sector continues to flag labor-market weakness.
Spot gold rose 0.2% to $4,206.64 per ounce, its strongest level since October 21. U.S. gold futures for December delivery dipped 0.1% to $4,211.50.
Weak U.S. labor market and expectations of another Fed cut
Traders anticipate that the backlog of economic indicators will reveal a softening U.S. labor market, increasing pressure on the Fed to deliver at least one more rate cut in December. Private surveys have already pointed to labor-market weakness.
The government resumed operations after a record 43-day shutdown, under a funding deal that keeps federal agencies running through January 30. While the Fed lowered interest rates last month, Chair Jerome Powell warned that further easing this year is not guaranteed due to the lack of timely data.
A Reuters poll found that 80% of economists expect a 25 bps cut at the Fed’s December 9–10 meeting. Lower rates generally support gold, which pays no yield and is viewed as a safe-haven asset during periods of economic uncertainty.
Standard Chartered noted that gold’s correlation with major macro drivers — including the dollar and real yields — has weakened significantly in recent weeks, reflecting a shift toward structural concerns such as U.S. dollar softness and rising debt levels.
Other precious metals
Silver slipped 1.1% to $52.83 per ounce after hitting its highest since October 17.
Platinum fell 1.9% to $1,585.10.
Palladium dropped 1.2% to $1,456.50.
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