Gold prices climbed back above the $4,200 mark on Monday, supported by growing market confidence that the US Federal Reserve will deliver a 25 basis point rate cut at its policy meeting later this week.
Spot gold was last trading 0.3% higher at around $4,209, while gold futures edged slightly lower to $4,238 an ounce.
Analysts at HSBC noted that gold has been buoyed by rising risk aversion and mounting expectations of looser US monetary policy. A softer US dollar — with the Dollar Index now trading below 99 — has also helped lift the metal, given their typically inverse relationship.
However, analysts cautioned that much of the expected rate cut may already be priced in, meaning any further decline in the dollar could be limited. While gold’s momentum remains positive, weaker physical demand may hold back additional short-term gains.
According to CME’s FedWatch tool, traders now assign an 87% probability to a quarter-point Fed cut on 9–10 December, following softer economic data and a more dovish tone from policymakers. Lower rates are generally supportive for non-yielding assets like gold.
Looking ahead, UBS strategist Giovanni Staunovo expects the precious metal’s upward trajectory to continue into next year:
“We still look for more rate cuts next year, which should push gold to $4,500 an ounce.”
With uncertainty still gripping global markets, gold continues to shine as investors seek security and long-term value.
