Gold hits three-week high on dovish Fed bets

Gold rose above $4,130 on Tuesday, hitting a three-week high as growing economic uncertainty in the United States strengthened expectations of a near-term Federal Reserve rate cut. The rally came amid a backdrop of softening labor market data and weakening consumer confidence, which bolstered demand for the precious metal as a hedge against potential economic downturns.

Last week’s reports revealed job losses in October, particularly across the government and retail sectors, signaling cracks in what had previously been a resilient employment landscape. At the same time, consumer sentiment dropped to a 3½-year low in early November, reflecting mounting concerns over household finances and the broader economic outlook.

Traders in futures markets are now pricing in about a 64% probability of a 25-basis-point rate cut at the Fed’s December meeting, while some policymakers have hinted at the need for more aggressive action. Fed Governor Stephen Miran notably suggested that a 50-basis-point reduction could be warranted, citing falling inflation and a gradual rise in unemployment as justification for a faster easing cycle.

In Washington, the US Senate advanced a measure to reopen the federal government after a 40-day shutdown, a move that could temper some of the safe-haven flows into gold in the short term. Nevertheless, investors remain cautious, with geopolitical tensions and global monetary easing trends providing continued support for bullion.

Adding to the bullish sentiment, JP Morgan Private Bank projected that gold prices could exceed $5,000 per ounce in 2026, driven primarily by sustained central bank buying—particularly from emerging markets—and diversification away from the US dollar.

Analysts noted that persistent fiscal deficits, coupled with ongoing inflationary pressures, could further enhance gold’s appeal as a long-term store of value.