On November 26, London spot gold traded within a narrow range overnight, while COMEX December gold futures rose 1.12% and SHFE gold gained 0.44%. Weaker US economic data reinforced market expectations for Fed rate cuts, with Governor Mester signaling dovish remarks. As of writing, CME FedWatch Tool now prices an 82.9% probability of a December rate cut. Short-term rate cut expectations continue to drive precious metals, suggesting range-bound trading ahead.
Economic indicators showed the US September PPI rose 2.7% YoY (vs 2.6% expected), while core PPI increased 2.6% (below 2.7% forecast) - marking the slowest annual growth since July 2024. ADP data revealed private employers cut 13,500 jobs weekly on average over four weeks, accelerating from previous 2,500 weekly reductions. September retail sales grew just 0.2% MoM, significantly missing estimates. The combination of moderating inflation and deteriorating employment strengthened bets for Fed easing. Governor Mester stated the economy requires substantial rate cuts as current policy "restricts growth" while gradually pushing unemployment higher.
Geopolitically, Ukraine's National Security Council secretary reported consensus on "core terms" for Geneva talks with the US. Gold's upward momentum weakened as Russia-Ukraine tensions show signs of easing, diminishing its safe-haven appeal. Prices may consolidate at elevated levels, with time needed for clearer direction. Investors are advised to maintain caution or consider strategic accumulation at dips from an asset allocation perspective.
