[New York Gold Prices] Rise on Hopes for Fed Rate Cut in December

(New York=Yonhap Infomax) Jin Woo Choi – International gold prices climbed higher.

Expectations for a Federal Reserve policy rate cut in December exerted upward pressure on gold prices. As gold does not yield interest, it tends to be favored in low-rate environments.

As of 12:30 p.m. local time on the 24th, December delivery gold futures (GCZ5) on the COMEX division of the Chicago Mercantile Exchange (CME) were trading at $4,092.10 per troy ounce, up $12.60, or 0.31%, from the previous settlement price of $4,079.50.

Christopher Waller, a key Federal Reserve Governor, said in an interview with Fox News that he supports a rate cut in December.

However, he noted, "After that, January will be a challenging period as a vast amount of data will be released to determine whether another rate cut is appropriate," adding, "A meeting-by-meeting approach is necessary."

According to CME FedWatch, as of 12:56 p.m. in New York, the federal funds rate (FFR) futures market reflected a 79.1% probability that the Fed will cut rates by 25 basis points in December, up 8.1 percentage points from the previous day's 71.0%. The Federal Open Market Committee (FOMC) is scheduled to meet for two days on the 9th and 10th of next month.

Bart Melek, Head of Commodity Strategy at TD Securities, explained, "The market is increasingly confident that the Fed will cut rates in December," adding, "The combination of lower rates and a weaker U.S. dollar has supported gold prices in the current environment."

jwchoi@yna.co.kr

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