New Delhi: Gold surged to its highest level in nearly two weeks on Wednesday, buoyed by strengthening market expectations that the US Federal Reserve may soon cut interest rates. Spot gold climbed sharply in early trade, touching $4,161.10 per ounce, a level last seen on November 14. The renewed momentum in the bullion market comes at a time when global risk sentiment is shifting and investors are increasingly positioning themselves for a potential monetary policy pivot in the United States. The anticipation of lower borrowing costs has generally supported non-yielding assets like gold, which tend to gain when interest rates fall and the US dollar weakens.
The upward movement in gold was driven by growing confidence among traders that the Federal Reserve could introduce a rate cut as early as December. Market forecasts now place the probability of such a move at roughly 84%, a striking increase from the 50% likelihood estimated just a week earlier. This sharp rise in expectations followed a series of softer-than-expected US economic indicators, including lacklustre retail sales and a cooling producer price index, both of which have fuelled sentiment that the Fed may loosen monetary policy sooner rather than later. At the same time, the US dollar slipped to a one-week low, making gold cheaper for international buyers and encouraging fresh inflows into the precious metals market.
Alongside gold's rally, broader market cues remained aligned with the narrative of easing monetary conditions. Asian stocks opened higher, buoyed by the prospect of a supportive policy path in the United States. Government bond yields, particularly the 10-year US Treasury yield, stayed near monthly lows, further enhancing gold’s appeal as investors sought safer alternatives with stable long-term value. Despite the bullish outlook, some uncertainty lingers in major consuming markets. For instance, China’s net gold imports through Hong Kong experienced a significant decline in October, suggesting uneven demand conditions in the world’s largest gold-buying region even as global prices advance.
Looking ahead, traders and analysts will closely monitor upcoming US economic releases for clearer signals on the Fed’s next steps. Data on employment, inflation, and consumer spending will play a crucial role in determining whether the anticipated rate cut materializes. For now, gold remains firmly supported by the combination of a weaker dollar, subdued yields, and renewed safe-haven demand. As global markets await further clarity from Washington, the precious metal appears well-positioned to maintain its upward trajectory, at least in the near term.