Gold hits six-week high, silver at record high

Spot gold was up 0.3% at $4,241.21 per ounce, after hitting its highest since October 21, while silver was up 1.3% to $57.12 per ounce

Gold prices jumped on Monday to their highest level in six weeks, while silver soared to a record high.

Spot gold was up 0.3% at $4,241.21 per ounce as of 0855 GMT, after hitting its highest since October 21.

Silver was up 1.3% to $57.12 per ounce after hitting an all-time high of $57.86 earlier.

Market participants are now starting to price in again a rate cut for the Fed in December, as well the expectation is the new FOMC chairman will be a dove that is supporting investment demand for gold, said UBS analyst Giovanni Staunovo.

Silver benefits from the same factor as gold, plus the expectation of further improving industrial demand next year, Staunovo said.

Traders have increased bets over the last few weeks for interest rate cuts in December following weaker U.S. data, and dovish comments by several policymakers, including central bank Governor Christopher Waller and New York Fed President John Williams.

Markets are now pricing an 88% probability of a rate cut, shows the CME’s FedWatch tool.

Lower borrowing costs tend to support non-yielding bullion.

White House economic adviser Kevin Hassett said on Sunday he would be happy to serve as the next chairman of the Fed if chosen. Like Trump, Hassett believes rates should be lower.

Markets now await the November ADP employment report on Wednesday and core U.S. Personal Consumption Expenditures September figures on Friday for further cues on the central bank’s policy path.

Meanwhile, the U.S. dollar dropped to a two-week low, making dollar-priced bullion cheaper for holders of other currencies.

We expect gold to rise to $4,500/oz next year and silver to rise to $60/oz next year, said Staunovo.