FED Easing Expectations Add Momentum to Gold

According to Tim Waterer, Chief Market Analyst at KCM Trade, metal entered the week with solid buying interest. He noted that, despite the recent decline in the probability of a rate cut, investors still anticipate a policy easing move from the Federal Reserve next month. Waterer added that ongoing concerns in financial markets continue to support appetite for non-yielding assets such as gold.

Weakening Economic Signals Reinforce Policy Outlook

Economic data published last week revealed that the U.S. economy shed jobs in October. Declines in government and retail employment, combined with cost-cutting measures fueled by artificial intelligence adoption across businesses, contributed to an uptick in layoffs.

In addition, a survey released in early November showed that U.S. consumer confidence had dropped to its lowest level in nearly three and a half years. Analysts pointed out that concerns over what could become the longest government shutdown in history are weighing heavily on consumer spending. These developments have strengthened market expectations that the Fed may opt for a rate cut in its final meeting of the year.

Data from the CME FedWatch Tool indicates that investors now assign a 67% probability to a December rate reduction. A lower interest rate environment generally increases the appeal of non-interest-bearing assets such as gold, providing further price support.

Renewed Demand for Gold-Backed ETFs

Alongside physical buying, movements in gold-backed exchange-traded funds are also drawing attention. SPDR Gold Trust, the world’s largest gold ETF, reported that its holdings rose from 1,040.35 tons on Thursday to 1,042.06 metric tons on Friday—a 0.16% increase. This uptick underscores the continued investor shift toward gold amid rising macroeconomic uncertainties.

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