Gold Heads for Fourth Monthly Gain

Gold trimmed its gains on Friday as investors sought to take profits after prices reached a two-week high earlier in the session, but it remained on track for a fourth consecutive monthly gain thanks to optimism over a potential interest rate cut by the Federal Reserve in December.

Meanwhile, a malfunction at the Chicago Exchange halted trading on its platform for currencies and futures, including foreign currencies, commodities, Treasury bonds, and stocks. The price of December gold futures reached $4,221.30 per ounce before the outage.

The spot gold price rose by 0.1% to $4,162.59 per ounce by 09:37 GMT, after hitting its highest level since November 14 earlier in the session, and was expected to achieve a weekly gain of 2.4%. Bullion is expected to record a 3.9% increase this month.

Independent analyst Ross Norman stated, "With these huge gains (in gold), the temptation to take profits is significant, but the underlying sentiment remains very positive." He added, "There are concerns about global debt, tariffs, and sanctions," while ongoing purchases from central banks have also contributed to the rise in gold prices this year.

Gold, a non-yielding asset, tends to perform well in low-interest-rate environments. Traders are now pricing in an 85% chance of a rate cut in December, up from 50% the previous week.

Comments from senior officials, such as Federal Reserve Governor Christopher Waller and New York Fed President John Williams, along with the release of weak U.S. economic data following the government shutdown, have bolstered expectations for the central bank to cut interest rates next month.

The U.S. dollar experienced its worst week since late July. The dollar's weakness increases the attractiveness of dollar-denominated gold for buyers using other currencies. On another note, UBS raised its silver price forecast by $5-8 per ounce, expecting the metal to trade at $60 per ounce in 2026.

The spot silver price rose by 0.4% to $53.65 per ounce, while platinum increased by 2.2% to $1,643.60, with silver prices rising by 7.2% and platinum prices by 8.8% during the week, respectively. Palladium rose by 1% to $1,452.27, and is expected to achieve a weekly gain of 5.8%.

The yellow metal saw some volatility earlier in the month as markets questioned the expectations for monetary easing in December. However, expectations for a rate cut in December revived over the past week, leading to strong gains in gold.

Markets estimate an 82.8% probability that the Federal Reserve will cut interest rates by 25 basis points during its meeting on December 9-10, a sharp increase from the 28.5% recorded last week.

Confidence in a rate cut in December has been bolstered by statements from some Federal Reserve officials warning against negative monetary policy, while weak U.S. economic data has reinforced expectations for a rate cut.