Gold price just keeps climbing. Early Tuesday, prices shot up to a two-week high, landing near $4,141 during Asia’s trading hours. What’s pushing it up? Investors are betting hard that the Federal Reserve will cut interest rates in December.
There’s more behind the rally, too. Worries about a possible US government shutdown have people looking for safe places to park their money, and gold is the classic choice. Even though there’s been some progress toward reopening the government, folks aren’t exactly breathing easy about where the economy is headed.
Surprisingly, the gold price didn’t slow down much, even as the US dollar picked up a bit and global markets showed a little more risk appetite. That says a lot. Investors still want gold as a shield against all this uncertainty, even when other options look a bit better on paper.
Recent numbers haven’t done much to inspire confidence in the US economy, either. The University of Michigan’s Consumer Sentiment Index sank to 50.3 in November—the lowest since mid-2022. That drop just adds to the feeling that the Fed will take a softer stance on interest rates, which usually gives gold a boost.
The CME Fed Watch Tool now shows markets are pricing in over a 60% chance the Fed will cut rates in December. With US banks closed for Veterans Day, things are pretty quiet on the trading front, but everyone’s waiting for Fed officials to speak later this week—hoping for more hints about what’s next.
Technically speaking, gold’s move above $4,100 just confirms the bulls are in charge. The next big hurdle? Resistance around $4,155 to $4,160.
