Gold gains for fourth day on softer dollar, Fed rate-cut optimism

Gold rose for a fourth straight session on Wednesday, supported by a weaker dollar and expectations that the reopening of the US government and flow of economic data will strengthen bets for an interest rate cut from the Federal Reserve next month.

FUNDAMENTALS

* Spot gold was up 0.4% at USD 4,142.70 per ounce by 0012 GMT, after hitting its highest since October 23 on Tuesday.

* US gold futures for December delivery rose 0.8% to USD 4,149.20 per ounce.

* The US Senate passed a deal on Monday to restore federal funding after a record-long shutdown that has disrupted food benefits for millions, left hundreds of thousands of federal workers unpaid, snarled air traffic, and delayed the release of government economic data.

* The deal still needs approval in the House of Representatives, where Speaker Mike Johnson has said he wants a vote as soon as Wednesday. It will then go to US President Donald Trump to be signed into law.

* Traders are pricing in a roughly 68% probability that the US central bank will cut rates by 25 basis points next month, up from 64% in the previous session, according to CME Group’s FedWatch tool.

* Non-yielding gold tends to do well in a low-interest-rate environment and during economic uncertainties.

* The dollar index, meanwhile, fell for a fifth straight session, making gold more attractive for other currency holders.

* Fed Governor Stephen Miran said on Monday a 50-bps rate cut would be appropriate for December, noting that inflation is falling while the unemployment rate is drifting higher.

* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.41% to 1,046.36 metric tons on Tuesday from 1,042.06 tons on Monday.

* Elsewhere, spot silver firmed 0.1% to USD 51.29 per ounce, platinum eased 0.1% to USD 1,583.10, and palladium was steady at USD 1,443.56.

(Reporting by Brijesh Patel in Bengaluru; Editing by Rashmi Aich)