Gold prices rise; weak U.S. data fuels Dec rate cut hopes

Investing.com -- Gold prices rose Wednesday as disappointing U.S. economic readings resulted in increased conviction that the Federal Reserve will cut interest rates in December. 

At 08:50 ET (12:50 GMT), Spot gold rose 0.3% to $4,154.60 an ounce and gold futures for February rose 0.5% to $4,187.60/oz. 

Gold rises as weak data fuels rate cut bets 

Gold has seen demand of late, posting gains of over 2% this last week, after weak U.S. economic readings for September furthered the case for more monetary easing by the Federal Reserve, adding to recent dovish comments from a number of Fed policymakers who suggested an easing at the December Fed meeting was very much in play. 

Retail sales barely grew in the month, consumer confidence fell in November and core producer inflation shrank more than expected, signaling persistent cooling in the U.S. economy. 

The prints for September will be among the last few official economic readings the Fed has before its December meeting, with a prolonged government shutdown expected to have indefinitely delayed labor and inflation data for October.

PCE price index data, the Fed’s preferred inflation gauge, was rescheduled to be released on December 5 by the Commerce Department’s Bureau of Economic Analysis. 

Markets are pricing in a more than 80% chance the Fed will cut rates by 25 basis points during its December 9-10 meeting, up sharply from around 40% chance seen last week, CME Fedwatch showed. 

Lower interest rates tend to benefit non-yielding assets such as gold by diminishing the appeal of rate-sensitive assets. 

Other precious metal prices also advanced on this notion. Spot silver rose 1.5% to $51.858/oz, close to a record high, while spot platinum rose 0.6% to $1,574.05/oz. 

Deutsche Bank lifts 2026 gold price forecast 

Deutsche Bank has lifted its 2026 gold price forecast, citing resilient investor demand, strong central-bank buying, and limited supply response.

The bank now expects gold to average $4,450/oz in 2026, up from a previous forecast of $4,000/oz, with a projected trading range of $3,950–4,950/oz. A high of $4,950/oz would sit about 14% above current December 2026 futures, it said.

“The positive structural picture shows inelastic demand from central banks and ETF investment diverting supply from the jewellery market. Also, overall growth in demand outpaces supply,” Deutsche Bank analyst Michael Hsueh said in a note.

Hsueh expects official sector buying to rebound next year after a slight dip in 2025. He cites reserve-manager surveys showing the highest share of central banks planning to increase gold allocations in years, with one respondent calling gold the “ultimate protection against black swan tail risk events.”

Third-quarter official demand was the third highest on record in real-dollar terms despite elevated prices.

Copper has further upside - Deutsche Bank

Among industrial metals, benchmark copper futures on the London Metal Exchange rose 1% to $10,963.90 a tonne.

Prices of the red metal were buoyed by major Chilean producer Codelco signaling that it will sharply increase prices for its Chinese customers. 

Deutsche Bank also lifted its 2026 copper price forecast to $10,600 per tonne, with peak prices projected to exceed $11,000 per tonne in the first half of the year.

The brokerage noted that severe supply disruptions have pushed copper prices to near-record levels. 

Despite a marked slowdown in Chinese demand in the second half of 2025 and concerns over a potential AI-driven investment bubble, Deutsche Bank emphasized that, barring a global economic slowdown, an incentive-based pricing regime is likely to continue. 

The brokerage pointed to global electricity demand, which outpaced GDP growth in 2024, as a key driver that should sustain healthy expansion in copper demand through electrification and digitalization trends.

Ambar Warrick contributed to this article