FX.co ★ Gold Rallies to 1-Month High

Gold surged above $4,220 per ounce on Friday, reaching its highest level in a month, and is poised for a fourth consecutive monthly increase. This rise is attributed to market expectations of a potential rate cut by the Federal Reserve in December. Recent dovish statements from several Federal Reserve officials, coupled with postponed economic data that indicates underlying economic weakness, have further bolstered the anticipation of rate easing. Furthermore, Kevin Hassett, widely regarded as a frontrunner to replace Jerome Powell, has expressed support for interest rate reductions. This has increased the likelihood of a 25 basis-point cut to over 80%, with traders now anticipating approximately three additional cuts by the end of 2026. Steady purchases by central banks and robust inflows into gold ETFs from non-sovereign sources have sustained the demand for the metal. Combined with declining real yields, these factors may drive gold to its strongest annual performance since 1979.