Gold Prices Climb Amid Fed Rate Cut Speculation and Central Bank Demand
Gold Prices Climb Amid Fed Rate Cut Speculation and Central Bank Demand
As of November 26, 2025, gold prices have risen to over a one-week high, driven by increasing expectations of a U.S. Federal Reserve interest rate cut and sustained central bank purchases. Spot gold is currently trading at $4,162.99 per ounce, marking a 0.8% increase, while U.S. gold futures for December delivery have risen by 0.6% to $4,165.20. Source
Macroeconomic Drivers
The primary catalyst for this upward movement is the growing anticipation of a Federal Reserve rate cut in December. The probability of such a cut has surged to 85%, up from 30% just a week ago, according to the CME FedWatch tool. This shift is influenced by speculation that Kevin Hassett, known for advocating lower rates, may be nominated as the next Fed chairman. Additionally, despite a decline in new unemployment claims indicating resilient layoffs, concerns over job creation and weakening consumer confidence persist, further bolstering gold's appeal as a safe-haven asset. Source
Central Bank Demand
Central banks continue to play a significant role in supporting gold prices. Deutsche Bank has raised its 2026 gold price forecast to $4,450 per ounce, up from a previous estimate of $4,000. This revision is attributed to steady investor interest and sustained central bank demand, which are absorbing a large portion of the gold supply and reducing availability for the jewelry market. The bank anticipates a trading range between $3,950 and $4,950 for 2026, with ETF inflows expected to support a price floor around $3,900. Source
Technical Signals
From a technical perspective, gold's Relative Strength Index (RSI) stands at 88, suggesting that the metal may be overbought and could be due for short-term consolidation. However, the overall trend remains bullish, supported by macroeconomic factors and central bank activities. Source
Investor Sentiment
Investor sentiment towards gold remains positive, with the SPDR Gold Trust reporting a rise in holdings to its highest level since July 2022. This indicates strong institutional interest in gold as a hedge against economic uncertainty and potential inflationary pressures. Source
Multi-Currency Pricing
For our European readers, it's important to note that gold prices have also appreciated in euro terms. The current exchange rate places gold at approximately €3,700 per ounce, reflecting the metal's strength across different currencies. Similarly, in British pounds, gold is trading around £3,200 per ounce, underscoring its global appeal as a store of value.
Conclusion
In summary, gold's recent price surge is underpinned by expectations of a Federal Reserve rate cut, robust central bank demand, and ongoing economic uncertainties. While technical indicators suggest potential short-term consolidation, the broader outlook for gold remains positive, making it a focal point for investors seeking stability in volatile markets.
