By Bas Kooijman, CEO and Asset Manager of DHF Capital S.A
Gold rose on Wednesday, after a batch of US economic figures signaled softer consumer momentum and job market risks. The data strengthened expectations of a Federal Reserve rate cut next month.
Retail sales for September showed only a marginal 0.2% increase, pointing to a moderation in household spending. Combined with producer-price data that remained broadly contained, the figures reinforced recent dovish remarks from several Fed officials who have highlighted growing labour-market fragility.
Markets now price an over 85% probability of a 25-basis-point cut in December, a sharp shift from roughly 30% just a week ago, helping to drag US yields lower and underpin demand for non-yielding assets such as gold.
Geopolitics continued to provide an additional layer of support. In the Middle East, tensions remain high, ensuring persistent demand for safe-haven assets. In Eastern Europe, tentative progress toward a potential peace framework has not prevented further incidents, supporting gold.