Gold prices rose in European trading on Tuesday, extending gains for the third consecutive session and reaching a three-week high, supported by strong investment demand for the precious metal as a safe-haven asset, especially amid expectations of a potential US interest-rate cut in December.
However, gains were capped by the continued strength of the US dollar in foreign-exchange markets, following the Senate’s approval of a preliminary agreement to end the longest government shutdown in US history.
Price Overview
• Gold prices rose 0.8% to $4,149.02 an ounce — the highest since October 23 — from an opening level of $4,115.06, after touching an intraday low of $4,114.94.
• On Monday, gold settled 2.9% higher, marking its second consecutive daily gain and the largest single-day rise since October 16, boosted by active demand for the metal.
US Dollar
The US Dollar Index rose 0.15% on Tuesday, holding gains for a second straight session and reflecting continued strength in the greenback against a basket of global currencies.
The dollar’s rise came as markets anticipated an imminent end to the US government shutdown, after the Senate on Monday evening passed an agreement to restore federal funding and conclude the record-long closure.
The bill now moves to the House of Representatives, where Speaker Mike Johnson said he aims to approve it on Wednesday and send it to President Donald Trump for signature into law.
US Interest Rates
• A survey released Friday showed that US consumer confidence fell to its lowest level in nearly three and a half years in early November, amid concerns over the economic impact of the prolonged government shutdown.
• Federal Reserve Governor Steven Miran said Monday that a 50-basis-point rate cut would be appropriate for December, noting that inflation is easing while unemployment continues to rise.
• According to CME Group’s FedWatch tool, markets currently price in a 63% chance of a 25-basis-point rate cut in December and a 37% chance of rates remaining unchanged.
• To reassess these expectations, investors are closely monitoring comments from Fed officials, with government data releases expected to resume as early as Thursday.
Outlook for Gold
Market strategist Ilya Spivak said the perception that the government shutdown is nearing its end has been interpreted as a removal of one layer of uncertainty, giving markets permission to return to one of this year’s dominant speculative narratives.
He added that the broader trend for the remainder of the year remains upward and that, at this stage, the path of least resistance for gold appears to be a return to its October high — with potential for further gains beyond that level.
SPDR Holdings
Holdings in the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, were unchanged on Monday at 1,042.06 metric tons — the highest level since October 24.
