Happy Friday, traders. Welcome to our weekly market wrap, where we take a look back at these last five trading days with a focus on the market news, economic data, and headlines that had the most impact on gold prices and other key correlated assets— and may continue to in the future.
Here’s what you need to know:
- Gold climbed nearly $150/oz on the week, finishing near $4,225/oz and closing in on October’s all-time high at $4,250/oz.
- Expectations for continued Fed rate cuts, with high odds of another move in December, helped drive demand for non-yielding assets like gold.
- Dollar weakness and persistent geopolitical risks added further support, reinforcing gold’s role as a hedge against uncertainty.
So, What Kind of a Week Has it Been?
Gold spot prices have risen by nearly $150/oz this week, thanks to a steady climb higher, bookended by two sharp rallies. This has put the yellow metal at a trading price of $4225/oz, within striking distance of the all-time high of $4250 notched in October. All this at the end of a week where we might have expected to see gold prices weakening as traders and investors liquidate to lock in profits on the final day of November.
Fed Rate-Cut Odds Dominate Market Focus
It’s apparent, though, that the medium-term expectations of continued monetary policy easing by the Federal Reserve outweigh the market’s interest in locking in gains (and therefore closing out the potential for more).
As of Friday morning, odds of a December rate cut—what would be the third consecutive cut of 25 basis points or more—are priced at 80%, a 50 percentage point increase from just a week ago. And, less directly, the market seems to be projecting as many as three further cuts in 2026.
Dollar Weakness and Geopolitics Add Fuel
No surprise then that gold, which is a non-yielding asset, has seen so much increased interest as investors project that the rates which underpin the available returns of all US Dollar-denominated yields are expected to potentially drop by a full percentage point year-over-year. Gold’s rally has also been enhanced by the US Dollar itself weakening over the last 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 that pivots around Washington, DC, continue with little signs of stopping.
Next Week’s Data and the Fed
Looking ahead to next week, the market may still be easing back into a regular cadence of receiving macroeconomic data that can inform projections and price valuations for gold. Communications from the White House (as the boss of the BLS) have quashed any hope of being able to see actionable analysis of consumer inflation, labor market performance, or national GDP that was withheld during the month-long shutdown of the federal government.
But we do expect to get a print of the September PCE Price Index next Friday, just days ahead of the December FOMC meeting.
In the meantime, traders, I hope you can get out and safely enjoy your weekend for the next couple of days. After that, I’ll see you back here next week for another market recap.
