FX.co ★ Gold Nears Two-Week High on Weak US Data

Gold prices soared to $4,150 per ounce, marking their highest level since mid-November. This uptick is attributed to a series of unexpectedly weak economic indicators from the United States, bolstering the likelihood of a Federal Reserve interest rate reduction in December. In September, US retail sales experienced a modest rise of just 0.2%, down from August's 0.6% increase and falling short of the anticipated 0.4% growth. Additionally, data from ADP revealed that private sector employers cut an average of 13,500 jobs weekly over the four weeks concluding on November 8, signifying a significant downturn from previous weeks. Simultaneously, producer price data suggested that inflationary pressures remained largely in line with prior expectations. Earlier in the week, gold had already surged by nearly 2% following comments from Fed Governor Christopher Waller, who endorsed a December rate cut in light of ongoing labor market weaknesses. His views were consistent with recent statements from San Francisco Fed President Mary Daly and New York Fed President John Williams. The market now assigns a probability exceeding 80% to a 25-basis-point rate reduction next month.