WASHINGTON (dpa-AFX) - Gold prices surged on Friday, hitting a one-month high, as expectations of a rate cut by the U.S. Federal Reserve next month continues to intensify among investors despite positive signals on the end of the Russia-Ukraine war taking some sheen off the yellow metal.
Front Month Comex Gold for December delivery jumped by $53.10 (or 1.27%) to $4,218.30 per troy ounce. Gold skyrocketed by $138.80 (or 3.40%) per troy ounce for this week.
Front Month Comex Silver for December delivery spiked by $3.53 (or 6.67%) to $56.446 per troy ounce. Silver catapulted by $6.533 (or 13.09%) per troy ounce for this week. Notably, this is a new record high for silver, which has risen for four consecutive sessions.
U.S. markets were closed yesterday on account of the Thanksgiving Day holiday.
Today, a technical outage at the Chicago Mercantile Exchange (CME) briefly disrupted trading activity in the futures markets.
Last week, the U.S. Bureau of Labor Statistics published the September jobs data. The data was a mixed bag of strength and weakness in the labor market.
Unemployment increased to 4.4%, while payroll growth was at 119,000 jobs - the strongest since April.
U.S. President Donald Trump has explicitly stated his desire to have a low-interest-rate regime multiple times.
Last week, Trump urged Treasury Secretary Scott Bessent to fix the 'too high' interest rates. Trump even jokingly added he would fire Bessent if he does not heed to the request.
Among the U.S. Federal Reserve's board of governors, Michelle Daly, Christopher Waller, John Williams, and Stephen Miran have all recently indicated that a rate cut is warranted before the end of the year.
Among other Fed officials, some have been equivocal and a few, like Susan Collins, have called for holding rates steady.
On Tuesday, the Conference Board data revealed that consumer confidence had declined to its lowest level since April.
Days before, Bloomberg reported that Kevin Hassett is likely the leading candidate to succeed Jerome Powell as Federal Reserve Chair when his term concludes in May.
All these developments have reinforced expectations among traders that the central bank will trim interest rates next month.
On the geopolitical front, the nearly four-year Russia-Ukraine war is getting more intense, with Russia unrelenting in its aggression. Currently, the Russian army is advancing in eastern Ukraine.
To halt the war, Trump administration has drafted a new 10-point plan to which Ukraine President Volodymyr Zelenskyy has given formal consent though he wanted to solve some minor issues in the proposal for which he is ready to talk to Trump.
Next week, U.S. envoy to Russia Steve Witkoff is landing in Russia to discuss the peace plans. U.S. Army Secretary Dan Driscoll is scheduled to visit this week.
Russian President Vladimir Putin has reiterated his demand to keep some of the territories Russia occupied in Ukraine. This issue could be the stumbling block in the ceasefire plan.
These developments raised expectations among investors that the war may end soon, and this eroded some of the safe-haven demand for gold. However, continuing gold purchases by central bank and rate cut expectations supported gold prices on the upside.
Currently, CME Group's FedWatch Tool is indicating that investors are betting on an 86.9% chance of a 25-basis-point interest rate cut at the Federal Reserve's meeting on December 9 and 10.
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