Gold prices climbed on Wednesday morning, as US economic data added to expectations that the Federal Reserve could cut interest rates in December.
Gold futures (GC=F) rose 0.5% to $4,197.80 per ounce at the time of writing on Friday morning, though spot gold advanced 0.8% $4,162.05 an ounce.
Data released on Tuesday showed that US retail sales slowed in September, giving investors the first official glimpse of consumer spending in two months after the government shutdown halted a wide swath of economic data. Headline retail sales grew by 0.2% in September, which was below expectations of a 0.4% month-on-month increase.
Meanwhile, separate data showed that US consumer confidence tanked in November. The Conference Board’s reading hit 88.7 in November, down 6.8 points from October’s level of 95.5.
In addition, a preliminary estimate from ADP Research showed that US private employers shed an average 13,500 jobs per week, in the four weeks to 8 November.
The data pointed to further signs of weakness in the US economy, raising expectations that the Fed would cut rates in December.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said:
The prospect of lower rates tends to see gold prices rise, as this boosts the appeal of holding the precious metal as a non-yielding asset.
In a note on Wednesday morning, Deutsche Bank (DBK.DE) research analyst Michael Hsueh said that the bank was upgrading its forecast for gold prices in 2026.
He said Deutsche Bank expected gold prices to average towards $4,450 per ounce in 2026, up from a previous forecast of $4,000. The bank expected gold prices to have a yearly range of $3,950 to $4,950 an ounce in 2026.
