Fed Rate Cut Bets Heat Up: Here's Why Gold & Silver Are Having a Moment

Yellow metal is on fire right now—gold just jumped 1.16% to $4,139 per oz, while silver popped 1.27% to $50.93. The reason? The Fed is basically hinting hard at a December rate cut.

What Just Happened

Today’s U.S. inflation data came in tamer than feared. Producer prices only edged up 0.3% month-on-month (softer than expected), and the year-on-year PPI sitting at 2.7% suggests inflation’s not running away. Meanwhile, retail sales grew 0.2% in September—steady but nothing crazy.

The plot twist? Fed officials are now openly pushing for cuts. Christopher Waller basically said “let’s cut again in December,” and Mary Daly’s arguing the job market weakness is scarier than inflation. Translation: rate cuts are coming.

The Numbers That Matter

• 84.9% – That’s the probability the Fed drops rates 25 basis points on December 9-10 (via CME FedWatch Tool)
• Consumer Confidence tanked to 88.7 from 95.5, showing people are getting nervous
• Weekly job cuts hit 13,500/week on average—labor market’s clearly cooling fast

Why Gold’s Rallying

Here’s the simple part: lower rates = weaker dollar = gold looks cheaper globally + higher demand. Plus, when people panic about the economy (see: collapsing confidence), they buy gold as insurance. Right now both dynamics are firing.

The Catch

Not all Fed officials are on board. Some still think one more cut might be enough for this year. But the market’s already pricing in the dovish scenario hard—84.9% says the Fed’s going December.