Gold prices climbed 2% on Monday to their highest level in two weeks, as weaker U.S. economic data strengthened expectations of a Federal Reserve rate cut next month, while a softer dollar added further support to the metal.
Spot gold rose 2% to $4,078.45 per ounce by 0956 GMT, its highest since October 27, while U.S. gold futures for December delivery gained 1.9% to $4,087.10.
The dollar index slipped 0.1%, making gold more affordable for international buyers.
“There are growing concerns about the U.S. economy following weak data, with market focus now centered on the dollar index,” said Jigar Trivedi, senior research analyst at Reliance Securities. He added that safe-haven demand has also increased amid ongoing trade and geopolitical tensions.
Recent data showed U.S. job losses in October, particularly in government and retail sectors, while consumer sentiment dropped to its lowest in nearly three and a half years in early November amid concerns about the prolonged government shutdown.
On Sunday, the U.S. Senate advanced a bill to reopen the government after a 40-day shutdown, though White House economic adviser Kevin Hassett warned that fourth-quarter growth could turn negative if the impasse continued.
Markets are now pricing in a 65% chance of a Fed rate cut in December. Gold, which offers no yield, typically benefits in periods of low interest rates and economic uncertainty.
Saxo Bank noted that while gold could approach $5,000 and silver $65 within the next 12 months, it remains cautious about predicting an immediate return to recent highs.
Elsewhere, spot silver gained 3.1% to $49.79 per ounce, the highest since October 21, while platinum rose 1.6% to $1,570.15 and palladium advanced 1.4% to $1,399.93.
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