Gold Prices Rise on US Rate Outlook as Silver Holds Near Record Levels

Gold edged higher on Tuesday, driven by market expectations of a potential U.S. interest rate cut in January. Investors remained cautious ahead of critical jobs data due later in the day, while silver maintained levels close to its recent record highs.

Gold Fundamentals and Market Performance

Spot gold rose 0.1% to $4,304.92 per ounce as of 0103 GMT, with U.S. gold futures holding steady at $4,333.20 an ounce. The precious metal has surged more than 64% in 2025, breaking several records and ranking among the year’s top-performing assets.

The U.S. dollar weakened to near a two-month low at the start of the Asian trading session on Tuesday. Last week, the Federal Reserve delivered a 25-basis-point rate cut in a divided vote, signaling a likely pause in further reductions due to persistent inflation and uncertain labor market conditions. Market participants are now pricing in a 76% chance of an additional 25-basis-point rate cut in January, with some traders predicting two cuts. This week’s non-farm payroll report is expected to provide further clarity on the Fed’s monetary policy path.

Fed Governor Stephen Miran emphasized that current above-target inflation does not reflect underlying supply and demand, noting that “prices are now once again stable,” and indicating a return to more predictable market conditions. Non-yielding gold continues to benefit in a low-interest-rate environment, bolstering investor demand.

Silver, Platinum, and Palladium Movements

Spot silver dipped 0.5% to $63.60 per ounce after hitting a record high of $64.65 last Friday. The metal has gained 121% year-to-date due to tightening inventories, strong industrial demand, and its designation on the U.S. critical minerals list.

Meanwhile, spot platinum added 0.8% to $1,797.0 per ounce, while palladium fell 0.3% to $1,561.94. The broader precious metals market remains sensitive to U.S. monetary policy, economic data releases, and investor appetite for non-yielding assets like gold.

Overall, gold remains a strong performer, benefiting from global uncertainties and favorable rate expectations. Traders and investors are closely monitoring upcoming data releases, which could influence both gold and silver markets in the short term.

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