Gold Breaks Above $4,000 as Fed Rate Cut Bets Rise
Gold prices climbed sharply on Monday, pushing back above the $4,000 per ounce threshold as a weaker U.S. dollar and growing expectations of a Federal Reserve rate cut fueled demand for the precious metal.
As of 09:15 ET (14:15 GMT), spot gold rose 2.2% to $4,085.51 per ounce, while December gold futures gained 2.1% to $4,094.85 per ounce. The rally marked the metal’s highest level in two weeks, driven by a combination of rate-cut speculation and softness in the dollar.
Dollar Weakness Boosts Gold and Metals
Gold’s upward move came as the U.S. dollar extended recent declines, following a series of disappointing economic indicators that reinforced market expectations for another Federal Reserve rate cut in December.
Data on Friday showed the University of Michigan’s consumer sentiment index dropped to its lowest point in nearly three and a half years, while Challenger job cut reports earlier in the week revealed the worst wave of layoffs in two decades.
According to the CME FedWatch Tool, traders are currently pricing in a 61.9% probability that the Fed will lower interest rates by 25 basis points next month. Lower rates typically pressure the dollar and boost demand for gold, which becomes more attractive when yields fall.
Other precious metals also benefited from the softer dollar. Spot platinum gained 2.8% to $1,592.30 per ounce, while spot silver advanced 3.3% to $49.73 per ounce.
Shutdown Resolution Adds to Market Optimism
Investor sentiment improved further as the U.S. Senate voted 60–40 to advance a funding bill aimed at ending the record-long government shutdown. The decision broke a Democratic filibuster that had stalled negotiations for weeks and is expected to allow the release of delayed U.S. economic data once federal agencies reopen.
The potential end of the shutdown, combined with rising rate-cut expectations, helped lift gold prices as traders positioned for a weaker dollar environment and increased safe-haven demand heading into December.
