At the close of trading on 11/12, the global spot gold price increased by nearly 52 USD, settling at 4,279 USD an ounce. This marks its highest level since the session on 21/10.

The market rally began late on 10/12, following the US Federal Reserve (Fed)'s announcement of a 25 basis point (0.25%) cut in its benchmark interest rate. This marks the third time the agency has eased monetary policy this year. Low interest rates typically support gold, an asset that does not pay fixed interest.

The Dollar Index, which measures the USD's strength against six other major currencies, also fell to an 8-week low. This makes gold more affordable for buyers outside the US.

"Inflation has not truly reached the Fed's 2% target. Therefore, cutting interest rates in an inflationary environment - which is not optimal - will greatly benefit gold," Edward Meir, an analyst at Marex, commented.

World gold prices have risen sharply since the Fed announced its interest rate cut. Chart: Kitco

Despite the current trend, Fed officials signaled a potential pause in rate cuts to further monitor labor market trends. They also stated that inflation "is still accelerating." Investors are currently awaiting the US monthly jobs report, to be released on 16/12, for additional clues on the Fed's future direction.

Since the start of his second term, US President Donald Trump has openly advocated for interest rate cuts. He set the criterion for nominating the next Fed Chair as someone who supports rate reductions. Currently, White House economic advisor Kevin Hassett is considered a leading candidate for the position.

Silver prices also continued to set new records, at one point reaching 64.3 USD an ounce during the session. Meir commented, "Silver prices seem to be pulling gold prices higher, with platinum and palladium also rising. There are many factors currently supporting this upward trend."

Platinum prices rose 2.5% to 1,697 USD an ounce. Palladium also increased 1.1%, closing the session at 1,492 USD.

Ha Thu (according to Reuters)