Gold continued its gains today, Tuesday, and recorded its highest level in about three weeks, with rising expectations that the Federal Reserve (the US Central Bank) would make another cut in interest rates in December, which enhanced the demand for the precious metal, which is considered a safe haven.
The price of gold in spot transactions rose 0.4% to $4,131.83 per ounce by 00:53 GMT, which is the highest level since October 24, while US gold futures contracts for December delivery increased 0.4% to $4,138.70 per ounce, according to Reuters.
Data last week showed that the US economy lost jobs in October, with employment in the government and retail sectors declining.
A survey showed on Friday that American consumer confidence fell to its lowest level in three and a half years in early November, amid fears of the repercussions of the longest government closure in the history of the United States.
The CME Group’s Fed Watch tool shows that traders now expect, by 64%, that the US central bank will cut interest rates by 25 basis points next month.
Federal Reserve Board member Stephen Miran said yesterday, Monday, that a cut of 50 basis points would be appropriate in December, pointing to declining inflation and the high unemployment rate.
Gold, which does not generate a yield, usually benefits from a low interest rate environment and economic uncertainties.
Yesterday, Monday, the US Senate approved a settlement that would end the longest government closure in the history of the United States, putting an end to the weeks-long stalemate that led to the disruption of food aid to millions of citizens, left hundreds of thousands of government employees without salaries, and disrupted air traffic.
