Oil prices assess geo-risk premium, gold prices hit two-week high as expectations for Fed rate cut rises

Basic news

On Monday (December 1, Beijing time), spot gold was trading around US$4,215 per ounce. The price of gold, driven by the continued rise in expectations for the Federal Reserve to cut interest rates, saw an overall rise in the precious metals market in November. Spot gold hit a two-week high last Friday. At $4226.56 per ounce, silver set a new historical record, showing the strong momentum of the precious metals market; U.S. crude oil traded around $59.55 per barrel, up 1.64%. A Russia-Ukraine peace agreement is "very likely" to be reached to limit oil price increases. However, the Iranian Revolutionary Guard seized a smuggled fuel tanker in the Persian Gulf, boosting the morning oil price trend.

Stock Market

In quiet trading during the Thanksgiving holiday, U.S. stocks closed slightly higher on Friday, led by the retail and technology sectors. Although technical glitches at the CME Group caused fluctuations during the session, the three major indexes still recorded considerable weekly gains, and the market's optimistic expectations for the Federal Reserve to cut interest rates continued to provide support for the stock market.

The Dow Jones Industrial Average rose 0.61% to 47716.42 points last Friday; the S&P 500 Index rose 0.54% to 6849.09 points; the Nasdaq rose 0.65% to 23365.69 points. As the market closed early on the day after Thanksgiving, overall trading volume was light.

Last week, expectations that the Federal Reserve may start cutting interest rates in December dominated market sentiment, driving the three major indexes to surge across the board. The S&P 500 index rose 3.73% on the week, the Nasdaq performed better, rising 4.91%, and the Dow Jones Industrial Average rose 3.18%.

Except for the health care sector, all other sectors of the S&P 500 index rose. Retail stocks benefit from Black Friday shopping seasonSince the start of the financial crisis, technology stocks have generally rebounded. Intel shares soared 10.2%, becoming the main driver of the S&P 500 index. On the news, there are reports that Intel will begin supplying Apple with its lowest-end M-series processors as early as 2027. This move is regarded by the market as an important breakthrough for its foundry business. Eli Lilly bucked the trend and fell 2.6%, dragging down the healthcare sector.

Despite last week's strong performance, throughout November, the market has become divided. The S&P 500 and the Dow rose only slightly, while the tech-heavy Nasdaq fell 1.51%. This reflects investors' concerns about overvaluation in areas such as artificial intelligence, and they are taking profits and reducing risk exposure.

On Friday morning, CME Group experienced a system failure due to a data center cooling problem, which temporarily suspended trading in global foreign exchange, xm-forex.commodities and stock contracts. Joe Saluzzi, co-head of trading at Themis Trading, xm-forex.commented: "Today is lucky. The trading volume is very low, but it may have a greater impact." Cole Smead, CEO of Smead Capital Management, said: "Everyone has realized in the past few weeks that the future direction of artificial intelligence is still very unknown."

As the holiday shopping season officially kicked off last week, the performance of these key sales days from Thanksgiving to Black Friday to Cyber ​​Monday will become an important benchmark for judging the performance of retailers. Amid the tug-of-war between interest rate cut expectations and valuation concerns, U.S. stocks are trying to find a new balance point at the end of the year.

Gold Market

Driven by the continued rise in expectations of interest rate cuts by the Federal Reserve, the global precious metals market experienced an overall rise in November. Spot gold prices hit a two-week high last Friday, and silver set a new historical record, demonstrating the strong momentum of the precious metals market.

Spot gold rose 1.6% on Friday, hitting its highest level since November 13 to $4,226.56 per ounce. Gold prices rose by 3.9% last week, and rose by 5.5% in November, marking the fourth consecutive month of gains.

Silver performed particularly well, soaring 5.5% last Friday, hitting a record high of $56.52 per ounce, with a monthly increase of 16%. Platinum and palladium also performed strongly, with platinum rising 10.3% on a weekly basis and palladium rising 5.2% on a weekly basis.

Bart Melek, global head of xm-forex.commodity strategy at TD Securities, pointed out: "It is expected that economic growth will continue to slow down by 2026, and the Federal Reserve is likely to cut interest rates, which will bring some investors back to the gold market." This view is widely recognized by the market, and traders currently expect that the possibility of the Federal Reserve cutting interest rates in December has risen sharply from 50% last week to 87%.

The recent dovish stance of Federal Reserve officials, coupled with the weak economic data released after the U.S. government shutdown, have jointly strengthened the market's expectations of interest rate cuts, providing strong support for gold, which does not pay interest rates.

During last Friday’s trading session, CME GroupDue to a system failure, its currency trading platform and futures trading covering foreign exchange, xm-forex.commodities, U.S. bonds and stocks were interrupted for several hours, and trading was not resumed until around 8:30 a.m. Eastern Time. This episode added some twists and turns to the day's precious metals trading.

Despite the strong performance of precious metal prices, the physical demand side has diverged. Gold demand in major Asian markets has been suppressed. Although the wedding season in India has begun, high gold prices have significantly inhibited retail investors' willingness to buy.

Oil market

The international crude oil market closed slightly lower on the last trading day of November, with the two major benchmark oil prices setting their longest monthly losing streak since 2023. The market is reassessing geopolitical risk premiums and setting its sights on the OPEC+ meeting.

On Friday, Brent crude oil January futures fell 0.22% to US$63.20 per barrel; the more active February contract fell to US$62.38. U.S. crude oil futures edged down 0.17% to settle at $58.55 a barrel. Although both major contracts rose about 1% last week, they ended lower for the fourth consecutive month, showing continued pressure on the market.

Oil prices are under pressure mainly from the following aspects, and supply pressure continues: Data from the U.S. Energy Information Administration last Friday showed that U.S. crude oil production increased by 44,000 barrels per day in September, reaching a record of 13.84 million barrels per day, deepening market concerns about oil glut.

The progress of peace talks between Ukraine and Russia continues to affect the market. Signs that a peace deal could be reached pushed oil prices sharply lower early last week, but they have recovered over the past three sessions as negotiations dragged on.

Rystad analyst Janiv Shah pointed out: "Strengthening fuel oil refining margins have supported crude oil demand in some places, but the negative impact of oil glut expectations is putting pressure on oil prices."

OPEC+ member countries are expected to determine a process for the upcoming review of each country's oil production capacity, and the results of the review will provide the basis for setting oil production quotas in 2027. OPEC+, led by Saudi Arabia, is expected to finalize the specific mechanism for the review as members hold an online meeting on Sunday, a source said. For OPEC+, "maximum sustainable production capacity" is a sensitive issue: some member states hope that their new production capacity will be recognized in order to win a larger share of the total quota; while other member states have difficulty reaching the production ceiling corresponding to their existing quotas. Clarifying the actual total production capacity of each country will not only help make quota settings more realistic, but also increase the credibility of any future production reduction measures.

Foreign Market

Against the backdrop of rising expectations for an interest rate cut by the Federal Reserve, the U.S. dollar weakened sharply last week, recording its worst weekly performance since July 21. Weak U.S. economic data prompted traders to increase bets that the Federal Reserve is about to begin a rate-cutting cycle.

The U.S. dollar index fell by 0.61% last week. This decline was mainly due to the market’s response to the Fed’s monetary policy change.Strengthening of expectations. Strategists pointed out: "The series of data released after the government shutdown is generally soft, and the overall data does tend to support interest rate cuts."

According to the CME Group's FedWatch tool, federal funds rate futures traders currently expect that the probability of the Federal Reserve cutting interest rates at the December 9-10 meeting has risen to 87%, a significant increase from 71% a week ago. The change xm-forex.comes as Fed officials are about to enter a pre-meeting quiet period.

The Japanese yen rose 0.14% against the US dollar to 156.09 yen. The market is paying close attention to Bank of Japan Governor Kazuo Ueda's upcoming speech on Monday, looking for clues on whether to raise interest rates at the December meeting. James Lord, head of foreign exchange and emerging market strategy at Morgan Stanley, believes that taking into account the current level of the dollar against the yen and the fiscal plan announced by the government, the Bank of Japan may raise interest rates in December.

The British pound rose 1.09% last week, recording its best weekly performance since early August. The gains were largely driven by Chancellor Reeves's budget plan, which will finance additional welfare spending by raising taxes to the highest level since World War II.

The Canadian dollar rose 0.39% against the U.S. dollar to 1.398 Canadian dollars. Canada's economy grew much better than expected in the third quarter as crude oil exports and government spending boosted economic activity.

CME Group's data center was suspended for more than 11 hours due to cooling problems, but the foreign exchange market did not react much to this in light trading after the U.S. Thanksgiving holiday. "Liquidity remains thin as most market participants have xm-forex.completed month-end trading before the holidays," said Karl Schamotta, chief market strategist at Corpay.

International News

The Iranian Revolutionary Guard seized a smuggled fuel tanker in the Persian Gulf

Iran's Mahr News Agency reported on November 30 that the Iranian Islamic Revolutionary Guard recently seized a foreign oil tanker suspected of smuggling fuel in the waters of the Persian Gulf. The tanker flew the Swaziland flag and carried 350,000 liters of smuggled fuel. The 13 crew members were all foreigners. According to Mojarad, xm-forex.commander of the Second Coastal Defense Zone of the Revolutionary Guards, the oil tanker involved has been transferred to a port in southern Iran and is currently undergoing unloading operations. The report did not specify the specific date of the arrest of the ship.

OPEC+ plans to reach an agreement on the closely watched production capacity review mechanism

OPEC+ member states are expected to determine a process for the upcoming review of each country’s oil production capacity, and the results of the review will provide a basis for formulating 2027 oil production quotas. OPEC+, led by Saudi Arabia, is expected to finalize the specific mechanism for the review as members hold an online meeting on Sunday, a source said. For OPEC+, "maximum sustainable production capacity" is a sensitive issue: some member countries hope to add new production capacity in their countriesobtain recognition to strive for a larger share of the total quota; while other member states have difficulty reaching the production ceiling corresponding to their existing quotas. Clarifying the actual total production capacity of each country will not only help make quota settings more realistic, but also increase the credibility of any future production reduction measures.

Russian President’s Press Secretary: The resolution of the Russia-Ukraine issue is accelerating

On November 30, local time, Russian President’s Press Secretary Peskov said that the resolution of the Russia-Ukraine issue is accelerating. He said countries must adjust their schedules and "be prepared to respond very quickly to everything."

Israeli opposition opposes pardoning Netanyahu

In response to Israeli Prime Minister Netanyahu’s pardon request, Israeli opposition leader Lapid pointed out on November 30 that the president “cannot pardon Netanyahu without confessing, repenting, and withdrawing from political life.” According to reports from the Times of Israel and other media citing relevant news, in his pardon request letter submitted to President Herzog, Netanyahu did not admit the crime or apologize for any wrongdoing, but instead emphasized the "broad public and moral responsibility" brought about by the tension caused by his corruption trial. Netanyahu's pardon request sparked fierce debate in Israeli politics. Officials and lawmakers from Netanyahu's Likud party and the current ruling coalition generally support him. Israeli Defense Minister Katz called on the president to approve the pardon request, emphasizing that the security situation Israel faces today is more xm-forex.complex than ever before and requires unified leadership to face threats. National Security Minister Ben Gwere said the pardon was "vital to national security" and called for reform of the justice system. However, the Israeli parliamentary opposition expressed strong opposition.

US media: Trump had a phone call with Maduro and directly asked him to step down

According to the US "Wall Street Journal" report on November 29, US President Trump directly threatened Venezuelan President Maduro during a phone call recently, saying that if Maduro refused to voluntarily step down, the United States would consider other means, including the use of force.

Blizzard swept across the Midwest of the United States, causing a large number of flight cancellations

On November 29, local time, a snowstorm swept across the Midwest of the United States, severely affecting the takeoff and landing of a large number of flights. Across the United States, more than 1,800 flights were canceled that day, and more than 7,500 flights were delayed. Affected by bad weather, a serious accident involving 45 vehicles occurred on an Indiana highway and the highway was closed. Currently, millions of residents are under winter weather warnings. Moreover, after the storm passes, the northern United States is expected to experience a cold wave, and the temperature will drop significantly.

Venezuela condemns the threat of the United States attempting to violate its airspace sovereignty

On November 29, local time, the Venezuelan Ministry of Foreign Affairs issued an announcement, strongly condemning the colonialist threat of the United States attempting to violate its airspace sovereignty. This move constitutes a threat to Venezuelaa new round of absurd, illegal and unjustifiable aggression against the Chinese people. The statement stated that it firmly condemns the public statement issued by U.S. President Trump that day, which attempted to exercise illegal U.S. jurisdiction outside Venezuela and used abnormal means to issue orders and threaten Venezuela’s national airspace sovereignty, territorial integrity, aviation security and national sovereignty.

Japan’s defense spending exceeds 11 trillion yen

According to a report by Nihon Keizai Shimbun on November 29, the Japanese government approved the 2025 supplementary budget at a cabinet meeting on the 28th. This will increase defense spending by more than 1 trillion yen (approximately 6.5 billion U.S. dollars), thereby achieving the goal of accounting for 2% of gross domestic product (GDP) ahead of schedule. According to reports, the Ministry of Defense allocated 847.2 billion yen in this supplementary budget, of which 122.2 billion yen was used to purchase frigates, submarines, etc. Another 56.6 billion yen will be used to purchase missiles, such as the improved Type 03 medium-range surface-to-air missile, which can intercept aircraft and missiles.

Domestic News

National Bureau of Statistics: Both ends of production and demand improved in November

On November 30, 2025, the Service Industry Survey Center of the National Bureau of Statistics and the China Federation of Logistics and Purchasing released the China Purchasing Managers Index. In this regard, Huo Lihui, chief statistician of the Service Industry Survey Center of the National Bureau of Statistics, gave an interpretation. There has been improvement at both ends of production and demand. The production index and new order index were 50.0% and 49.2% respectively, up 0.3 and 0.4 percentage points from the previous month. The production index rose to the critical point, and both manufacturing production and demand improved. From an industry perspective, the production index and new order index of industries such as agricultural and sideline food processing, non-ferrous metal smelting and rolling processing are both in the expansion range, and both ends of production and demand are relatively active; the two indexes of industries such as petroleum, coal and other fuel processing, chemical fiber and rubber and plastic products are below the critical point, and the prosperity level is low.

Central Bank: The inter-bank bond market’s spot transaction volume in October was 26.6 trillion yuan

Data from the People’s Bank of China showed that in October, the inter-bank bond market’s spot transaction volume was 26.6 trillion yuan, with an average daily transaction volume of 1.5 trillion yuan, a year-on-year increase of 10.2% and a month-on-month increase of 3.9%. Transactions with a single transaction volume of 5-50 million yuan accounted for 48.06% of the total transaction value, transactions with a single transaction volume of more than 90 million yuan accounted for 45.68% of the total transaction value, and the average single transaction volume was 41.7769 million yuan. The spot trading volume of the exchange bond market was 3.3 trillion yuan, with an average daily turnover of 193.79 billion yuan. There were 66,000 over-the-counter bond transactions of xm-forex.commercial banks, with a transaction value of 58.73 billion yuan.

China's auto dealer inventory alert index in November 2025 was 55.6%

On November 30, 2025, the latest "China Automobile Dealers Inventory Alert Index Survey" VIA (Vehicle Inventory Alert Index) released by the China Automobile Dealers Association showed that in November 2025, China's auto dealer inventory alert indexThe dealer inventory warning index was 55.6%, a year-on-year increase of 3.8 percentage points and a month-on-month increase of 3.0 percentage points. The inventory warning index is above the boom and bust line, and the prosperity of the automobile circulation industry has declined.

The above content is all about "[XM official website]: Oil prices assess the geo-risk premium, rising expectations for a Fed rate cut push gold prices to a two-week high". They are carefully xm-forex.compiled and edited by the XM foreign exchange editor. I hope it will be helpful to your trading! Thanks for the support!

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