Gold Jumps 6-Week High as Fed Cut Odds Hit 87% and Silver Sets New Record
Gold started the week on a strong footing, climbing to a six-week high as investors shifted toward safety and the U.S. dollar retreated...
Quick overview
- Gold reached a six-week high as investors sought safety amid a retreating U.S. dollar.
- U.S. equity futures fell nearly 0.8%, and major cryptocurrencies experienced significant declines, contributing to gold's appeal.
- Expectations for a December rate cut have strengthened, with an 87% probability now priced in by markets.
- Silver surged to a record high due to thin liquidity, while gold's technical outlook remains positive with a constructive trend.
Gold started the week on a strong footing, climbing to a six-week high as investors shifted toward safety and the U.S. dollar retreated to a two-week low. The softer dollar made gold more affordable for international buyers, adding another layer of support at a time when global markets are showing early signs of stress.
OANDA senior market analyst Kelvin Wong noted that U.S. equity futures slid nearly 0.8% alongside a sharp pullback in major cryptocurrencies, creating a feedback loop where risk-off positioning helped gold attract fresh inflows. Bitcoin dropped more than 3.6% to $87,881, while Ethereum fell 5% to $2,871, underscoring the broader defensive mood.
Fed Policy Expectations Strengthen
A wave of softer U.S. data and dovish commentary from Federal Reserve Governor Christopher Waller and New York Fed President John Williams has strengthened expectations for a December rate cut. According to CME FedWatch, markets now price in an 87% probability of a 25-basis-point cut.
White House economic adviser Kevin Hassett—considered a frontrunner for the next Fed Chair—added to the momentum by stating he believes interest rates “should be lower,” echoing President Trump’s stance. Investors now await Friday’s Core PCE report, the Fed’s preferred inflation gauge, for confirmation.
Lower interest rates typically boost gold because the metal carries no yield, making it more attractive when borrowing costs fall.
Silver Spikes on Thin Liquidity
Silver briefly surged to a fresh record high, driven less by fundamentals and more by the thin liquidity stemming from last week’s CME outage. While the rally lacks strong macro backing, it nonetheless reflects the heightened sensitivity of precious metals to rapid shifts in market depth.
Gold Technical Outlook: Constructive Trend Builds
Gold broke decisively above a multi-week descending trendline that capped every rally since mid-October. The breakout was supported by a clean sequence of higher lows from the $4,024 base and consistent closes above the 20-EMA—signs of improving demand. The breakout candle resembled a bullish engulfing formation, confirming buyers absorbed overhead supply.
Price briefly tagged $4,257 before moderating, though RSI remains above 60 with no bearish divergence, implying momentum is cooling but intact. A healthy pullback toward $4,190–$4,205 may retest former resistance as support.
Key Levels:
- Support: $4,197, $4,122
- Resistance: $4,257, $4,315, $4,382
A sustained higher-low structure keeps the bias pointed upward into December.
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