Gold extended its rally during Asian trade on Monday, touching its highest level in six weeks as traders positioned for a potentially decisive week of United States economic data and rising expectations of an imminent Federal Reserve rate cut.
By 4:05 pm AEDT (5:05 am GMT), spot gold traded 0.6% higher at $4,242.99 per ounce, supported by a softer U.S. dollar and mounting confidence that the Fed will ease policy again at its December meeting.
Markets are now assigning an 87.4% probability to a 25-basis-point cut, according to the CME Group FedWatch Tool.
The U.S. dollar, which last week recorded its steepest weekly decline in four months, continued to weaken on Monday, further buoying the precious metal.
Meanwhile, lingering uncertainty over the Fed’s future leadership is adding pressure to the greenback after Bloomberg reported last week that White House Economic Adviser Kevin Hassett has emerged as the frontrunner to succeed Jerome Powell.
U.S. Treasury Secretary Scott Bessent has indicated that President Donald Trump may announce his pick before Christmas.
Gold traders are now turning their attention to the U.S. ISM Manufacturing PMI for November, with the headline index expected to slip to 48.6 from October’s 48.7.
A deeper contraction in the manufacturing sector would bolster the case for a December cut and could provide fresh upward momentum for gold.
Later in the week, a series of U.S. data releases, including ADP employment, ISM services PMI, jobless claims, and the PCE price index, will offer further clarity on the economy’s trajectory and help shape market positioning ahead of next week’s Fed meeting.
