Fed Rate Cut Bets Drive Gold to Best November Performance in Years

TLDR

• Gold climbed to $4,183.01 per ounce on Friday, marking a 0.6% daily increase
• The precious metal gained 4.6% in November, its fourth month of consecutive growth
• Federal Reserve rate cut probability for December jumped from 28.5% to 82.8% in one week
• Silver rose 1.3% to $54.09 per ounce while platinum surged 2.4% to $1,643.04
• Technical charts show gold testing breakout levels above $4,200 resistance

Gold prices extended their winning streak on Friday as investors increased bets on a Federal Reserve interest rate cut next month. The metal reached $4,183.01 per ounce during Asian trading, posting a 0.6% gain for the session.

The yellow metal is now up 4.6% for November, representing its fourth straight month of positive returns. This weekly performance was equally strong, with gold advancing nearly 3% over the five-day period ending November 28.

Market expectations for monetary policy easing have shifted dramatically in recent days. Traders now see an 82.8% chance the Fed will cut rates by 25 basis points at its December 9-10 meeting. This marks a substantial increase from the 28.5% probability assigned just seven days ago, according to CME Fedwatch data.

The change in sentiment came after multiple Federal Reserve officials made dovish statements during the week. Recent U.S. economic reports also came in weaker than expected, adding support to the case for lower interest rates.

Precious Metals Rally Across the Board

Silver emerged as a standout performer among precious metals, jumping 1.3% to $54.0905 per ounce on Friday. The metal is now approaching its all-time high and has gained 11.3% throughout November.

Platinum prices surged 2.4% to reach $1,643.04 per ounce in Friday trading. The metal posted a 4.5% increase for the full month of November.

The weaker U.S. dollar played a key role in supporting precious metals prices this week. When the dollar declines, commodities priced in the currency become more attractive to international buyers.

Gold also benefited from increased safe haven demand driven by global uncertainty. The ongoing Russia-Ukraine conflict continues to create geopolitical tension. A diplomatic dispute between China and Japan added to concerns about international stability.

Trading Disruption Hits CME

A technical issue at the Chicago Mercantile Exchange disrupted commodity trading on Friday morning. The problem began at 00:00 ET when a cooling malfunction occurred at CyrusOne data centers.

Gold, silver, platinum, and copper futures all stopped updating at the time of the outage. Equity futures were also affected by the technical problem. CME Group confirmed they were working to resolve the cooling issue at the data center.

Trading volumes were already reduced due to the Thanksgiving holiday on Thursday. The combination of the holiday period and technical difficulties created unusually thin market conditions.

From a technical analysis perspective, gold is testing important resistance levels. The metal has been trading within a flag or wedge pattern for several weeks. Friday’s move pushed prices above this formation, suggesting a potential breakout.

A close above $4,200 would confirm the breakout and break the mid-November high. This could open the door for gold to target its October peaks. However, the low liquidity conditions during the Thanksgiving period make it difficult to assess whether this move has strong conviction behind it.

Month-end trading flows are also influencing price action as November closes. December has historically been a favorable month for gold prices, though results can vary year to year.

Spot gold stood at $4,183.01 per ounce as of 01:21 ET on Friday.

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