Metals Up on Rate Cut Optimism; CME Resumes Trading After Outage

 

Gold and Silver Up on Rate Cut Optimism; CME Resumes Trading After Outage

(Bullion News Network) – Gold and silver prices jumped on Friday to end the holiday-shortened trading week. Gold added nearly $60 per troy ounce to its spot price after markets opened, while silver gained over $3/ozt by the afternoon. The price action favored silver, driving the gold-silver ratio to a multi-year low of less than 75:1. Platinum-group metals also appreciated, with platinum and palladium gaining nearly $60/ozt and and just over $20/ozt, respectively. The move comes amid growing optimism among traders that the Federal Reserve will vote to cut interest rates for a third consecutive time at its December meeting. CME FedWatch now projects a probability of 86.9% that the FOMC will reduce the federal interest rate by 25 basis points in December, up from 83.4% on Nov. 26 and 71% on Nov. 21. 

Trading on CME’s futures and other vital markets resumed this morning after a pause of more than 10 hours caused by a data center outage. Multiple precious metal wholesalers paused trading until the CME outage was resolved, which could potentially cause a ripple effect on order fulfillment throughout the market. The outage also prompted a slow start on Wall Street, although the Dow, Nasdaq, and S&P 500 all gained in the hours after markets opened and the CME outage was resolved. All three major stock indexes gained following the outage resolution, putting them on track for a fifth consecutive day of gains.

On Nov. 26, J.P. Morgan revised its projections to expect a 25 bps rate cut from the Federal Reserve at the FOMC’s December 10th meeting. Goldman Sachs released a similar statement on Wednesday, saying that the September U.S. employment report might guarantee that the FOMC votes for another rate cut when it meets in December. Rate cut odds were already on the move last week, when President of the New York Federal Reserve John Williams signaled that he sees a rate cut as distinctly possible:

I still see room for a further adjustment in the near term to the target range for the federal funds rate to move the stance of policy closer to the range of neutral.

Precious metals continued to climb throughout the day. Gold gained over $55 per troy ounce by mid-afternoon, while silver added more than $3/ozt to its spot price. Silver set a fresh all-time high on Friday, logging an intraday high of over $56.50 per troy ounce amid mounting expectations that the FOMC will vote to cut interest rates when it meets for the final time of 2025 in December. Platinum-group metals also saw sustained movement after markets opened, with platinum adding over $60/ozt to its spot price as palladium gained another $33 per troy ounce.

Given that the delayed September report was the last U.S. employment breakdown available before the Fed’s Dec. 10 meeting, inflation data is expected to play a key role in determining rate cut expectations heading into December. A delayed Personal Consumption Expenditures (PCE) index for September will be released on Dec. 5 and could give traders (and the Fed) a bit more insight into where inflation is heading. 

With markets confident that another interest rate cut is coming, precious metals logged one of the strongest days of the month to end a shortened trading week. Gold gained nearly $60 per troy ounce, securing more momentum above $4,200/ozt. Silver saw an even stronger performance, adding more than $3 per troy ounce to its spot price to set a new all-time high.