Gold Prices Reach Record Levels Due to Expectations of Rate Cuts in the US

Since October 23, there has been a significant increase in gold prices on global markets. The main factors driving this rise are the growing expectations of another interest rate cut by the Federal Reserve in December and the resolution of the political crisis in the country.

This is reported by AgroReview

Price Dynamics of Precious Metals

As of November 11, the price of gold has risen by 0.5% to reach $4,100 per ounce, the highest level since the end of October. Gold futures contracts also increased by 0.4%, reaching $4,140 per ounce.

Against this backdrop, there is also a rise in prices for other precious metals. In particular, spot silver increased by 0.5% to $50.80 per ounce, platinum rose by 1% to $1.60 per ounce, and palladium grew by 1.3% to $1.40 per ounce.

Market Situation and Forecasts

According to Ole Hansen, head of commodity strategy at Saxo Bank, gold is actively appreciating amid increasing investor attention to the financial issues in the US. Analysts believe that the resumption of government operations will allow for new expenditures to be financed through additional borrowing.

Gold is “gaining momentum” due to “renewed attention to the fiscal problems in the US, as the resumption of government operations will allow for new spending to be financed through additional borrowing.”

The US Senate recently passed a compromise bill that ended the longest “shutdown” in the country’s history. This decision will allow for the resumption of economic statistics publication and strengthen expectations for a monetary policy easing in December. Market estimates suggest a 64% probability of a 25 basis point rate cut next month.

Chairman of the Federal Reserve, Stephen Miran, stated on October 10 that a 50 basis point rate cut is also being considered as a viable option in December.