How rate-cut expectations are driving gold and silver prices higher

Gold and silver extended their gains on Friday (November 28) as growing expectations of a US Federal Reserve rate cut in December continued to buoy global bullion markets. Firmer bets on monetary easing, coupled with a weakening US dollar, pushed gold toward a fourth consecutive monthly rise and lifted silver to fresh multi-month highs.

Spot gold rose 0.8% to $4,189.61 per ounce by 0303 GMT—its highest level since November 14—and is set for 3% weekly and 3.9% monthly gains.

US gold futures for December advanced 0.5% to $4,221.30 an ounce. Silver climbed 1.4% to $54.18 an ounce.

Rate-cut bets strengthen bullion appeal

The dominant driver for bullion has been rising conviction that the Fed will ease policy next month.

According to CME’s FedWatch tool, traders now assign an 87% probability to a December rate cut, a sharp rise from 50% one week ago.

“Liquidity is thin and that’s intensifying market moves. Much of the push in gold comes from pre-positioning for a lower interest-rate environment,” said Tim Waterer, Chief Market Analyst at KCM Trade.

Dovish comments from Fed officials, including Mary Daly and Christopher Waller, reinforced expectations of easing. The narrative gained further momentum as Kevin Hassett, seen as a front runner to replace Jerome Powell, echoed calls for lower rates.

A weaker US dollar—on track for its worst week since late July—provided additional support, making gold more attractive for buyers using other currencies.

Indian gold and silver prices hold steady

Indian bullion prices remained stable:

• 24K gold: ₹12,846 per gram


• 22K gold: ₹11,775 per gram


• 18K gold: ₹9,634 per gram


• Silver: ₹173 per gram | ₹1.73 lakh per kg

The ongoing wedding season is lending further support to domestic demand.

“Gold continues to offer long-term stability, and the current market environment is reinforcing investor confidence,” said Aksha Kamboj, Vice President, India Bullion & Jewellers Association (IBJA).

She added that silver’s gains are driven by solid industrial demand and rising investment flows.

According to Rahul Kalantri, VP Commodities at Mehta Equities, gold and silver maintained momentum in Asian trade despite muted global cues due to the US Thanksgiving holiday.

What’s driving the outlook?

Bullion markets are likely to stay sensitive to policy signals. Lower interest rates typically enhance the appeal of non-yielding assets like gold, while silver may continue to benefit from a combination of industrial demand and investment interest.

However, optimism around US-led diplomatic efforts in the Russia–Ukraine conflict may limit sharp upside moves, keeping price swings in check.

-With Reuters inputs