Gold, silver futures climb on Fed rate cut expectations after weak US data

New Delhi, Nov 26 (PTI) Gold and silver prices climbed in the futures trade on Wednesday, tracking firm global trends, as weak US macroeconomic data fuelled expectations of an interest rate cut by the Federal Reserve next month.

On the Multi Commodity Exchange (MCX), gold futures for December delivery jumped by Rs 475, or 0.38 per cent, to Rs 1,25,700 per 10 grams in a business turnover of 7,926 lots.

Silver futures too gained on the commodities bourse, with the white metal for December delivery surging by Rs 1,388, or 0.89 per cent, to Rs 1,57,709 per kilogram in 8,239 lots.

"Gold and silver prices jumped as delayed US economic data boosted expectations of a December Fed rate cut," Rahul Kalantri, Vice-President of Commodities, Mehta Equities Ltd, said.

In the international markets, Comex gold futures for December delivery increased by USD 28.20, or 0.68 per cent, to USD 4,193.40 per ounce while silver for December contract advanced 1.03 per cent to USD 51.61 an ounce.

"Gold rose to around USD 4,190 per ounce, hovering close to a nearly two-week high, following the release of delayed economic data that bolstered expectations of a December rate cut by the US Federal Reserve," Jigar Trivedi, Senior Research Analyst at Reliance Securities, said.

He noted that recent figures suggested a slowing of consumer momentum, with US retail sales rising just 0.2 per cent in September after a stronger gain in August, signalling softer household spending.

Producer price data also showed that inflation pressures broadly in line with expectations, reinforcing the view that the Fed may have room to ease policy soon. This comes after several Fed officials have voiced support for a reduction next month due to weakness in the labour market, Trivedi said.

Markets participants now see more than an 80 per cent probability of a 25 basis points interest rate cut in December, up from about 50 per cent a week earlier.

However, he added that the upside for gold prices remains capped amid signs of easing geopolitical tensions, after Ukrainian officials have agreed to a plan to end the war with Russia, reducing demand for safe-haven assets. PTI HG HVA