Gold Rises on Fed Rate Cut Optimism as Silver Surges to a Record High
Precious metals rallied as expectations of imminent U.S. Federal Reserve easing lifted sentiment, driving gold higher and pushing silver to an all-time peak.
Gold prices advanced on Friday as growing confidence in an upcoming U.S. Federal Reserve rate cut supported investor sentiment, while silver surged to a historic record following a year of strong industrial demand and tightening global supply conditions.
Spot gold climbed 1% to $4,212.16 per ounce, recovering momentum even as it remained on track for a modest weekly dip, reflecting the tug-of-war between near-term price pressure and strengthening expectations of monetary easing.
Market analysts said the broader rally was driven by weakening dollar trends as investors positioned for a potential rate reduction at the Fed’s December meeting.
A softer dollar typically supports precious metals by lowering the cost for international buyers, and traders noted that dovish remarks from senior Fed officials have boosted confidence that borrowing costs may decline sooner rather than later.
Economic indicators added further support, with recent U.S. data showing moderated consumer spending and slowing inflation in the core Personal Consumption Expenditures Price Index.
Even though the monthly inflation print showed a slight uptick, the yearly rate eased, helping build a narrative that interest rates may have peaked and that easing pressures could emerge in the months ahead.
Private payroll figures, meanwhile, reflected the sharpest drop in hiring in more than two and a half years, reinforcing the case for the Fed to shift toward more accommodative policy.
Markets reacted swiftly, with futures pricing showing an 87% probability of a 25-basis-point rate cut at the upcoming policy meeting, fueling stronger demand for non-yielding assets such as gold.
Analysts projected gold to trade within the $4,200 to $4,500 range in the near term, with potential to reach between $4,500 and $5,000 next year depending on the trajectory of U.S. monetary policy.
Longer-term expectations continue to hinge on inflation dynamics, geopolitical risk, global central bank purchases and ongoing economic uncertainty.
In key physical markets, demand in India and China softened as buyers awaited a possible correction after rapid price increases.
Traders in both countries noted that while long-term appetite remains strong, high spot prices have kept retail consumers cautious, especially in the lead-up to seasonal buying periods.
Silver saw an even more dramatic move, rising 2.6% to $58.59 per ounce and marking a 4% gain for the week after briefly touching a record $59.32.
Market strategists said silver is riding gold’s upward momentum while also benefiting from powerful structural tailwinds driven by industrial usage and clean-energy technology demand.
The metal has nearly doubled this year, rallying 98% amid supply deficits and rising demand from electronics, solar manufacturing and emerging energy technologies.
Its inclusion on the U.S. critical minerals list further supported sentiment, drawing investment interest from funds focused on long-term industrial transitions.
Silver’s surge has been accompanied by steady moves in other metals, with platinum holding firm at $1,646.10 and palladium gaining modestly to $1,453.39 as investors evaluated broader market signals.
Analysts noted that while these metals lack the dramatic momentum seen in gold and silver, they remain supported by industrial demand patterns and evolving global supply challenges.
The week’s movements highlight how sensitive precious-metals markets remain to policy signals, inflation trends and broad economic indicators.
With investors increasingly betting on lower borrowing costs and a softer dollar, both gold and silver have found renewed strength that could carry forward into early next year.
