Gold near two-week peak as tepid US data fuels Fed rate cut bets

Gold prices rose more than 1% to a near two-week high on Wednesday, after benign U.S. economic data reinforced expectations of a Federal Reserve interest rate cut next month, supporting non-yielding bullion.

Spot gold was up 1% at $4,172.18 per ounce at 1208 GMT, its highest since November 14. U.S. gold futures for December delivery were up 0.7% at $4,168.70 per ounce.

"Market participants are starting to price in again a U.S. rate cut for December," said UBS analyst Giovanni Staunovo.

Bullion, a non-yielding asset, tends to perform well in low-interest-rate environments.

"We continue to see further upside in the near term, with a year-end forecast of $4,200/oz and $4,500/oz mid next year," Staunovo said.

Data on Tuesday showed U.S. retail sales in September rose less than expected, while producer prices were in line with estimates.

U.S. consumer confidence also weakened in November as households grew more concerned about jobs and their financial outlook.

The data releases followed a series of recent dovish comments from Fed policymakers.

Traders now see an 83% chance of a Fed rate cut next month, compared to 30% a week ago, the CME FedWatch tool showed.

Additional support for the metal came from a report that White House economic adviser Kevin Hassett has emerged as the frontrunner to be the next Fed chair, reinforcing expectations of a dovish policy approach favored by President Donald Trump.

Investors now await the U.S. weekly jobless claims report due later Wednesday, a critical gauge for labor market health and Fed policy prospects.

Meanwhile, Deutsche Bank raised its 2026 gold forecast to $4,450 an ounce from $4,000, citing stabilizing investor flows and persistent central bank demand.

Among other metals, spot silver rose 2% to $52.43 per ounce, platinum was up 0.6% at $1,562.50, while palladium gained 1% to $1,411.57.