Gold Near Record High as Softer US Inflation Fuels Rate-Cut Hopes

Gold traded around $4,320 per ounce on Friday, hovering near its October record high and heading for a second straight weekly gain, supported by softer-than-expected US inflation that reinforced expectations of future interest-rate cuts.

November inflation eased to 2.7%, below forecasts of 3.1%, while core CPI slowed to 2.6%, its weakest pace since March 2021. The data strengthened the view that price pressures are cooling, bolstering the case for eventual Federal Reserve easing.

That said, the inflation report was partially constrained by the federal shutdown, which disrupted the BLS’s October price collection and limited month-over-month analysis.

Markets are currently pricing in about a 25% chance of a rate cut in January, with near certainty by April.

Geopolitical risks added further support, as the US halted sanctioned Venezuelan oil shipments following a tanker seizure, while President Vladimir Putin reiterated Russia’s territorial claims in Ukraine.

Overall, gold has surged roughly 65% this year, underpinned by easing inflation expectations, rate-cut hopes, and persistent geopolitical tensions.