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Gold Trading Higher Again on Expectations for a Cut to U.S. Interest Rates

BY MT Newswires | ECONOMIC | 12/01/25 09:04 AM EST

09:04 AM EST, 12/01/2025 (MT Newswires) -- Gold prices rose early on Monday, climbing for a seventh-straight session as traders anticipate another cut to interest rates from the Federal Reserve next week.

Gold for February delivery was last seen up US$4,292.30 per ounce, the highest since the Oct. 20 record price of US$4,359.40.

The Federal Reserve's policy committee is expected to end its two-day meeting on Dec. 10 with a 25 basis point cut to interest rates. The CME FedWatch Tool now sees an 87.4% probability for a cut to rates at the meeting, up from 63% a month earlier. Lower interest rates cut the carrying cost of owning gold, which pays no interest, while an uncertain U.S. fiscal outlook amid President Donald Trump's trade wars is also offering support.

"A combination of Fed rate-cut expectations, currency debasement concerns, fiscal debt anxiety and sticky inflation continues to underpin the (precious metals) sector," Saxo Bank noted.

The dollar was lower early, also bullish for gold. The ICE dollar index was last seen down 0.41 points to 99.05. Treasury yields rose, with the U.S. two-year note was last seen paying 3.524%, up 2.2 basis points, while the yield on the 10-year note was up 5.3 points to 4.071%.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.

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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

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