Gold rose with expectations of a Fed interest rate cut

Gold rose as investors' expectations increased that the U.S. Federal Reserve would cut interest rates in this week's meeting and the dollar weakened.

The gram of gold is trading at 5,761 TL

Gold prices rose on Monday as investors' expectations increased that the U.S. Federal Reserve would cut interest rates in this week's meeting and the dollar weakened.

Spot gold rose to $4,212.70, a 0.3% increase per ounce.

The dollar continued to decline slightly, remaining close to its lowest level in a month seen on December 4. This made gold, priced in dollars, cheaper for overseas buyers.

KCM Trade Chief Market Analyst Tim Waterer said, “Core PCE data passed smoothly, allowing the Fed to move forward with interest rate cuts this week. Expectations of a looser monetary policy are pushing gold prices higher.”

Waterer also added, “While the expected interest rate cut this week puts pressure on the dollar, it is also expanding the upward movement range for gold.”

In the U.S., consumer spending showed a moderate increase in September after three consecutive months of rising. This development came after private sector employment data showed the sharpest decline in two and a half years last month.

Dovish statements from Fed officials further strengthened expectations for monetary easing.

According to CME’s FedWatch tool, markets are pricing in about an 88% probability of a 25 basis point interest rate cut at the Fed meeting on December 9-10. Lower interest rates are generally supportive for instruments like gold, which do not provide yield.