Gold records its highest level in 3 weeks, supported by US interest rate cut bets

Gold continued its gains today, 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 percent to $4,131.83 per ounce by 00:53 GMT, the highest level since October 24, while US gold futures for December delivery increased 0.4 percent to $4,138.70 per ounce.

Data last week showed that the US economy lost jobs in October, with employment in the government and retail sectors declining.

A survey on Friday showed 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 shutdown in US history.

The CME Group’s FedWatch tool shows that traders now expect, by 64 percent, 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.