A softer inflation reading could boost rate-cut expectations and support further gains, while a stronger print may cap upside
Kaynat Chainwala,
AVP Commodity Research,
Kotak Securities
Mumbai, 5 December 2025: Spot gold is currently holding above $4,220 per ounce as investors remain cautious ahead of key U.S. inflation data that will influence the Federal Reserve’s upcoming policy decision. A softer U.S. dollar has supported bullion, while ongoing geopolitical uncertainties related to the Russia-Ukraine conflict continue to drive demand for safe-haven assets. Silver also rose nearly 2% to $58.50 per ounce, poised for a strong weekly gain following a recent record high. Market sentiment reflects mixed U.S. labor data, with jobless claims at a three-year low contrasting with a contraction in private payrolls, reinforcing expectations of an easing monetary policy. Markets currently price in an 87% probability of a 25-basis-point Fed rate cut next week. The near-term outlook for bullion remains cautiously positive, as investors focus on the Personal Consumption Expenditures (PCE) inflation report, the Fed’s preferred gauge. A softer inflation reading could boost rate-cut expectations and support further gains, while a stronger print may cap upside. Gold and silver may experience increased volatility ahead of next week’s Federal Open Market Committee (FOMC) meeting.
WTI crude oil prices are steady near $59.70 per barrel today, amid geopolitical tensions and risk premiums linked to the Russia-Ukraine conflict. The fading prospects for a near-term peace deal, coupled with Ukraine’s recent attacks on Russian oil infrastructure, continue to pressure supply outlooks. Additionally, U.S. indications of potential action against Venezuela’s oil output have added further risk concerns, as the country produces approximately 1.1 million barrels per day. Despite this, oil gains remain limited by ongoing oversupply worries and Saudi Arabia’s recent decision to cut its official selling prices for Arab Light crude to Asia to a five-year low, exerting downward pressure on regional pricing. Furthermore, an unexpected build in U.S. crude inventories and weak refinery margins weigh on prices. Crude oil remains supported by geopolitical uncertainties and expectations of Fed easing, but significant upside is constrained without a major supply disruption from the Middle East or Russia.
