On Monday (24 November), spot gold edged higher in choppy trade as investors began to shift their focus towards prospects for peace between Russia and Ukraine. After Donald Trump unexpectedly proposed a new 28-point peace plan last week and demanded that Ukraine agree by Thursday, the Ukraine issue has moved to the top of the agenda for European leaders. They have rushed to draft a counter-proposal and have criticised Washington’s latest move.

In addition, the Federal Reserve’s policy stance has long been a key barometer for the gold market, and this week’s shift is particularly noteworthy. Last Friday, New York Fed President John Williams delivered an unusually dovish message in a public speech, stating that the Fed could still lower interest rates in the near term without jeopardising its inflation target. This comment acted like a powerful shot in the arm, quickly reigniting market enthusiasm for a December rate cut.

Over the past two weeks, concerns voiced by several Fed officials about inflation remaining above the 2% target had led investors to sharply scale back their rate-cut bets, pushing the implied probability down to around 40% from much higher levels. Williams’ remarks have completely flipped that narrative.

According to CME’s FedWatch Tool, federal funds futures traders have lifted the implied probability of a December rate cut to around 70%–74%, a recent high. This is more than just a rebound in numbers – it represents a collective shift in market sentiment. The surge in such positioning has provided strong support for gold prices.

Against a backdrop of mixed U.S. macro data, the labour market is flashing more nuanced signals: while non-farm payrolls in September rose more than expected, the unemployment rate ticked slightly higher, and August’s figures were revised down into negative territory. These signs of labour-market softness further reinforce the case for rate cuts.

UBS has raised its mid-2026 gold price target from USD 4,200 per ounce to USD 4,500, citing the Fed’s rate-cut outlook, persistent geopolitical risks, ongoing fiscal concerns, and robust demand from central banks and ETF investors.

Market Commentary:

On the 4-hour chart, gold remains range-bound, with the MACD lines and histogram shrinking around the zero line. Although gold prices may face some short-term correction pressure, the medium- to long-term investment case remains compelling. A low-rate environment reduces the opportunity cost of holding non-yielding gold, while amplifying its value as a hedge against inflation.