Happy Friday, merchants. Welcome to our weekly market summary, where we take a look back at these last five trading days focusing on the market news, economic data and headlines that had the biggest impact on the prices of gold and other key correlated assets, and that may continue to do so in the future.
Here’s what you need to know:
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Gold rose nearly $150 an ounce for the week, ending near $4,225 an ounce and approaching October’s all-time high of $4,250 an ounce.
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Expectations of continued rate cuts by the Fed, with high likelihood of another move in December, helped boost demand for non-yielding assets like gold.
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Dollar weakness and lingering geopolitical risks added further support, reinforcing gold’s role as a hedge against uncertainty.
Spot gold prices have risen almost $150 an ounce this week, thanks to a steady rise accompanied by two strong rallies. This has placed the yellow metal at a trading price of $4,225 per ounce, within striking distance of the all-time high of $4,250 reached in October. All of this at the end of a week where we might have expected to see weakening gold prices as traders and investors liquidated to lock in profits on the last day of November.
It is clear, however, that medium-term expectations of continued monetary policy easing by the Federal Reserve outweigh the market’s interest in locking in profits (and therefore locking in the potential for more).
As of Friday morning, the odds of a rate cut in December (which would be the third consecutive cut of 25 basis points or more) are estimated at 80%, an increase of 50 percentage points from just a week ago. And, less directly, the market seems to project up to three more cuts in 2026.
It is no surprise, then, that gold, which is a non-yielding asset, has seen so much more interest as investors project that the rates underpinning available yields on all US dollar-denominated yields are expected to potentially fall by a full percentage point year-over-year. Gold’s rally has also been bolstered by the weakening of the US dollar itself over the past five days.
And then there is always the historical value of gold as a hedge against geopolitical risk and instability, which seems to be surrounding the market on all sides as wars in Ukraine and the Middle East, as well as a global trade war revolving around Washington, DC, continue with little sign of stopping.
Looking ahead to next week, the market may still be returning to a regular cadence of receiving macroeconomic data that can inform gold price projections and valuations. Communications from the White House (as head of the BLS) have quashed any hope of ever seeing actionable analyzes of consumer inflation, labor market performance, or national GDP that were withheld during the month-long federal government shutdown.