Gold prices surged on Thursday, driven by growing anticipation of a December interest rate cut by the US Federal Reserve. ANZ reported that the rally was fuelled by increasingly dovish signals from key policymakers. Comments from Fed Governor Christopher Waller, citing labour-market concerns, strengthened the case for a rate reduction at the next meeting. New York Fed President John Williams also indicated that near-term easing remains a possibility. The prospect of lower interest rates typically increases the attractiveness of gold as an investment.
Adding to the bullish sentiment were reports that Kevin Hassett, a close associate of Donald Trump and a proponent of lower interest rates, is the leading candidate to become the next Fed chair. This speculation further bolstered market expectations of a more accommodative monetary policy.
Despite the positive momentum for gold, recent US jobless-claims data provided a slight counterpoint. The data revealed an unexpected fall in applications last week. However, this did little to diminish the prevailing expectation of a rate cut.
Spot gold climbed 0.9 per cent to $US4168 an ounce, reflecting the overall positive trend in the precious metals market. The rise in gold prices coincided with gains across the broader precious-metals complex.
