Gold near two-week peak as tepid US data fuels Fed cut bets
- Traders see 83% chance of US interest rate cut in December
- US retail sales rose less than expected in September
- US consumer confidence falls in November
By Noel John
Nov 26 (Reuters) - Gold prices rose to a near two-week high on Wednesday, after benign U.S. economic data reinforced expectations of a Federal Reserve interest rate cut next month, supporting non-yielding bullion.
Spot gold XAU= was up 0.8% to $4,161.57 per ounce at 1019 GMT, its highest since November 14. U.S. gold futures GCcv1 for December delivery were up 0.4% at $4,157.40 per ounce.
"Market participants are starting to price in again a U.S. rate cut for December," said UBS analyst Giovanni Staunovo.
Bullion, a non-yielding asset, tends to perform well in low-interest-rate environments.
"We continue to see further upside in the near term, with a year-end forecast of $4,200/oz and $4,500/oz mid next year," Staunovo said.
Data on Tuesday showed U.S. retail sales in September rose less than expected while producer prices were in line with expectations.
U.S. consumer confidence also weakened in November as households grew more concerned about jobs and their financial outlook.
The data releases followed a series of recent dovish comments from Fed policymakers.
Traders now see an 83% chance of a Fed rate cut next month, compared to 30% a week ago, the CME FedWatch tool showed. FEDWATCH
Additional support for the metal came from a report that White House economic adviser Kevin Hassett has emerged as the frontrunner to be the next Fed chair, reinforcing expectations of a dovish policy approach favored by President Donald Trump.
Investors now await the U.S. weekly jobless claims report due later Wednesday, a critical gauge for labor market health and Fed policy prospects.
Meanwhile, Deutsche Bank raised its 2026 gold forecast to $4,450 an ounce from $4,000, citing stabilising investor flows and persistent central bank demand.
Among other metals, spot silver XAG= rose 1.7% to $52.28 per ounce, platinum XPT= was up 0.4% at $1,559.03, while palladium XPD= fell 0.2% to $1,395.
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