Gold and Silver Prices Rise Amid Fed Rate Cut Expectations

On the Multi-Commodity Exchange (MCX), gold futures for December delivery rose by ₹741, or 0.59%, reaching ₹1,25,966 per 10 grams. In a similar trend, silver futures for December delivery increased by ₹2,215, or 1.38%, to ₹1,62,236 per kilogram. These movements were observed on November 26, following the release of US economic data that strengthened market expectations for a potential rate cut by the US Federal Reserve in December.

As of 10:57 am IST, the gold contract for February 2026 delivery surged by ₹730, or 0.57%, to ₹1,27,725 per 10 grams. Concurrently, the silver futures contract for March 2026 delivery rose by ₹1,869, or 1.20%, to ₹1,58,190 per kilogram.

In the international market, Comex gold prices increased by 0.57% to $4,163.70 per ounce, while Comex silver saw a rise of 1.07%, reaching $51.635 per troy ounce. This uptick in precious metals is largely attributed to new US economic indicators that suggest a slowdown in growth, reinforcing predictions that the Federal Reserve may implement its third rate cut of the year during its upcoming meeting.

According to the CME Group's FedWatch tool, there is an approximately 85% likelihood that the Federal Reserve will reduce interest rates in December. This shift in market sentiment comes after a report by ADP, which indicated an average loss of 13,500 jobs per week over the four weeks ending November 8, a significant increase from the previous week’s loss of 2,500 jobs per week.

Consumer confidence in the United States also appeared to decline, dropping by 6.8 points month-on-month to 88.7 in September. Furthermore, retail sales data revealed that American consumers spent less than anticipated in September, with only a 0.2% increase compared to August, signalling a potential weakening of household spending.

Jigar Trivedi, Senior Research Analyst at Reliance Securities, commented, "The softer retail sales numbers indicate a deceleration in consumer momentum, which is likely to influence the Federal Reserve's decision on interest rates." The recent Producer Price Index report indicated a 0.3% rise for September, which was in line with expectations. Lower interest rates can exacerbate inflation, a key concern that has caused the Federal Reserve to be cautious regarding rate cuts.

Investors are also awaiting additional economic data, including the latest jobless claims report and updates on US Gross Domestic Product and Core Personal Consumption Expenditures (PCE) inflation index, which are anticipated later this week.

On the geopolitical front, there have been developments in the Russia-Ukraine conflict, with Ukraine agreeing to a plan aimed at resolving the ongoing war, which could impact market sentiments and metal prices moving forward.

The trends in gold and silver prices are also influenced by the evolving economic landscape and geopolitical events, suggesting that traders should remain vigilant in the coming days.