Gold advanced in Asian trading on Tuesday, building on a strong overnight surge as investors sharply increased odds of a Federal Reserve rate cut at the December 9–10 meeting. Growing caution ahead of critical U.S. economic reports also pushed demand toward haven assets, supporting gains despite a firm dollar.
Spot gold edged up 0.3% to $4,145.57 an ounce, while February futures rose 0.2% to $4,180.00 by 23:46 ET (04:46 GMT). Broader metals joined the rally, reflecting renewed optimism across commodities.
Fed Signals Push Rate-Cut Bets to 77%
Markets aggressively repriced expectations after two Fed officials hinted support for easing monetary policy next month. According to CME FedWatch, traders now assign a 77.2% probability of a 25-basis-point cut, nearly doubling from 41.8% a week earlier.
Lower interest rates typically benefit gold by reducing the opportunity cost of holding non-yielding assets. The metal has already logged several record highs this year, supported by back-to-back Fed cuts in previous meetings.
Additional safe-haven appeal came from escalating diplomatic friction between China and Japan, alongside persistent concerns over rising fiscal deficits in major economies.
Key metal moves included:
- Platinum: up 0.5% to $1,570.65/oz
- Silver: up 0.8% to $51.5555/oz
- LME Copper Futures: up 1.2% to $10,887/t
Markets Await PPI and Retail Data for Direction
Metal price movements were restrained as investors awaited a slate of U.S. economic data that will shape the Fed’s final policy decision of the year.
Although covering September, these releases represent the latest information available to policymakers. The data lineup includes:
- Producer Price Index (PPI) and Retail Sales on Tuesday
- PCE Price Index, the Fed’s preferred inflation gauge, on Wednesday
Government officials have indicated that October inflation and labor data will not be published due to the prolonged federal shutdown, leaving the Fed with a narrower information set. Earlier, this raised expectations for a December rate hold, but the recent dovish commentary has tilted sentiment decisively toward easing.
As traders await clarity, gold remains supported by policy uncertainty, geopolitical tensions, and a global search for stability amid inconsistent economic signals.
