Gold Prices Rise Amid Weaker Dollar and Rate Cut Expectations
Gold Prices Rise Amid Weaker Dollar and Rate Cut Expectations
On November 7, 2025, gold prices experienced a notable increase, driven by a weakening U.S. dollar and growing expectations of another interest rate cut by the Federal Reserve. Spot gold rose 0.7% to $4,005.53 per ounce, positioning it for a modest weekly gain. U.S. gold futures for December also saw an uptick of 0.3%.
Macroeconomic Drivers
The upward movement in gold prices is largely attributed to recent private-sector job data indicating weakness in the U.S. labor market, particularly in the government and retail sectors. Layoffs have surged due to cost-cutting measures and the increasing integration of artificial intelligence in business operations. This economic backdrop has heightened expectations for a rate cut, with market sentiment now reflecting a 67% chance of a reduction in December, up from 60% the previous session. The ongoing U.S. government shutdown, now the longest in history, further contributes to gold's appeal as a safe-haven asset, especially as official economic data becomes scarce.
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 strong central bank and institutional purchasing, as well as continued market volatility.
Investor Sentiment
Investor sentiment towards gold remains positive, bolstered by forecasts from major financial institutions. HSBC has increased its average gold price forecasts for 2025 and 2026, citing rising safe-haven demand amid geopolitical tensions, economic uncertainty, and a weakening U.S. dollar. The bank now projects gold to average $3,355 per ounce in 2025, up from $3,215, and $3,950 in 2026, a sharp revision from $3,125. Similarly, Bank of America Global Research has significantly increased its gold price forecast, now projecting that the metal could reach $5,000 per ounce by 2026, with an average price around $4,400 per ounce.
Performance of Other Precious Metals
Other precious metals also experienced gains. Silver rose 1.5% to $48.69 per ounce, platinum gained 0.6% to $1,550.70, and palladium increased 1.6% to $1,397.20. Despite these daily gains, platinum is heading for a weekly loss, while palladium is on track for a 2.4% weekly decline.
Conclusion
In summary, gold's recent price increase is underpinned by a combination of macroeconomic factors, technical indicators, and positive investor sentiment. As the U.S. dollar weakens and expectations for a Federal Reserve rate cut grow, gold continues to solidify its position as a preferred safe-haven asset in times of economic uncertainty.
For more detailed information, refer to the original article on Reuters: Gold gains as dollar weakens, US rate-cut bets grow.
