Gold Gains Momentum as Fed Policy Shift Looms

Gold prices advanced on Monday, approaching significant technical resistance levels amid growing market expectations that the Federal Reserve could implement interest rate cuts as soon as December. Weak economic indicators from multiple regions have further fueled this speculation, positioning the precious metal as the preferred asset for cautious investors.

Beyond macroeconomic factors, the physical gold market is displaying compelling fundamental strength. Recent data from COMEX warehouses reveals notable developments:

• Inventories held in COMEX vaults have registered substantial declines
• Specifically, "eligible" stocks available for immediate delivery have experienced a pronounced reduction
• Concurrently, open interest in gold futures contracts continues to climb, indicating heightened market participation

This combination of dwindling warehouse inventories alongside expanding trader engagement points toward robust underlying physical demand. These market fundamentals provide solid support for gold's valuation, independent of shorter-term speculative activity.

Should investors sell immediately? Or is it worth buying Gold?

Economic Concerns Drive Safe-Haven Demand

The global economic landscape is generating additional tailwinds for gold. Disappointing economic figures from various geographical regions have amplified the flight to safety among institutional and retail investors alike. In this environment of heightened uncertainty, gold continues to benefit from its historical role as both a crisis currency and reliable store of value.

Dollar Weakness and Interest Rate Expectations

Financial markets are increasingly positioning for a more accommodative monetary policy stance from the U.S. central bank. The possibility of rate reductions beginning next month is now being seriously considered by market participants. For gold, which provides no yield, this potential shift significantly enhances its attractiveness compared to interest-bearing assets.

The weakening U.S. dollar provides another supportive element. Lower interest rates typically exert downward pressure on the currency, making gold more affordable for international investors outside the dollar bloc—a classical demand driver for the precious metal.