FX.co ★ Gold Hits 3-Week High on Dovish Fed Bets

Gold surged beyond $4,130 on Tuesday, reaching its highest point in three weeks. This spike was driven by heightened economic uncertainty in the United States, which has led to increased expectations of an imminent interest rate reduction by the Federal Reserve. Recent data revealed job losses in October, notably within the government and retail sectors, while consumer sentiment in early November dropped to its lowest in three and a half years. Currently, traders see a roughly 64% probability of the Fed reducing rates by 25 basis points in December. Fed Governor Stephen Miran is pushing for a more significant half-point cut due to decreasing inflation and rising unemployment levels. Concurrently, the US Senate took steps to reopen the federal government following a 40-day shutdown, a move that might lessen the demand for gold as a safe-haven asset. Additionally, JP Morgan Private Bank has forecasted that gold prices could exceed $5,000 per ounce next year, primarily driven by increased purchases from central banks in emerging markets.