Gold prices soar as markets expect the Fed to cut interest rates soon

(Baohatinh.vn) - World gold prices increased sharply in the session on November 12, reaching a three-week high amid falling US bond yields and expectations that the Federal Reserve (Fed) will begin its interest rate cut cycle in December.

World gold price on Kitco floor at 8:30 this morning Vietnam time.

At the close of trading, spot gold rose $68 to $4,194 an ounce, reaching $4,208 an ounce – the highest level since October 21. The precious metal’s strong rally came as the yield on 10-year US government bonds fell 1% to a one-week low, ahead of the House of Representatives’ vote to reopen the US government after 42 days of shutdown – the longest period in the country’s history.

“The government is likely to reopen,” said Bart Melek, head of commodity strategy at TD Securities. “The market is waiting for economic reports – many of which are showing signs of weakness in the US economy.”

Delays in data releases due to the government shutdown have forced investors to rely on private sources. According to the latest ADP report, private businesses cut an average of more than 11,000 jobs per week from late September to late October, suggesting continued weakness in the labor market.

This development reinforces the forecast that the Fed will cut interest rates in December – with the market pricing in a 65% probability. In an environment of low interest rates and economic uncertainty, gold tends to gain strongly due to its role as a safe haven asset.

Along with the gold rally, the US stock market also improved thanks to the expectation of the government returning to work soon. The DJIA index increased 0.68% to a record 48,254 points, the S&P 500 inched up 0.06%, while the Nasdaq Composite slightly decreased 0.26% due to the adjustment of the technology group.

Amazon and Tesla shares fell more than 2%, Palantir fell 3.6%, Oracle fell 3.9%. AMD, on the other hand, jumped 9% after announcing a $100 billion revenue target from its data center segment. Banking and healthcare groups such as Goldman Sachs and UnitedHealth Group rose 3.5%, helping the DJIA hit its second consecutive record high, bringing its total gain since the beginning of the year to 13%.

Analysts say that if the Fed does loosen its policy in December, gold could continue to maintain its strong upward momentum, especially in the context of a weakening US dollar and widespread cautious sentiment in global financial markets.

Source: https://baohatinh.vn/gia-vang-tang-vot-khi-thi-truong-ky-vong-fed-som-ha-lai-suat-post299320.html