Gold Climbs as U.S. Dollar Weakens and Rate‑Cut Bets Gain Momentum

Gold futures edged higher after recent weakness in the U.S. dollar and mounting expectations that the Federal Reserve may cut interest rates in December. Key data showing job losses and the ongoing U.S. government shutdown have reinforced the metal’s appeal as a safe‑haven asset.

According to Reuters, spot gold rose around 0.4% to $3,994.03 per ounce in early Friday trading, with futures for December delivery reaching approximately $4,004.40 per ounce.

The rise comes despite gold remaining on track for a modest weekly loss after its sharp decline from October highs.

The breakdown in recent U.S. employment data — particularly losses in government and retail sectors, plus announced layoffs tied to cost‐cutting and AI adoption — has triggered renewed speculation of Fed policy easing. Market odds of a December rate cut rose to 69%, up from around 60% previously.

A weaker dollar also plays into the dynamics: when the greenback loses value, dollar‐denominated commodities like gold become cheaper for overseas buyers, boosting demand.

Investment strategists note that gold typically performs well in environments of low real yields, policy uncertainty and a depreciating dollar.
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Additionally, the prolonged U.S. government shutdown has amplified investor nervousness, with official data releases disrupted and reliance shifting to private sector indicators — further enhancing gold’s safe‑haven attraction.

What this means for investors:

The backdrop of weaker labour markets and policy loosening signals may continue to support gold in the near term.

Should the dollar rebound or the Fed push back on easing expectations, gold could face headwinds.

Given its historical role in hedging risk and preserving value, many portfolio managers are maintaining or increasing exposure to bullion.