Gold prices climbed in Asian trading on Wednesday, supported by renewed demand for safe-haven assets as concerns deepened over mounting fiscal pressures in major economies, particularly Japan.
Lingering doubts about whether the Federal Reserve will deliver a rate cut in December—paired with early signs of softening in the U.S. labor market and anticipation ahead of the Fed’s October meeting minutes—also helped lift gold.
The U.S. dollar consolidated after its recent rally, giving metal markets some breathing room. A broad slump in global equities, driven by anxiety surrounding inflated technology valuations, further strengthened the bid for gold. Investors are now looking to upcoming results from AI bellwether NVIDIA Corporation (NASDAQ:NVDA) for additional market direction.
By 00:54 ET (05:54 GMT), spot gold was up 0.6% at $4,092.51 an ounce, while December gold futures gained 0.7% to $4,093.79/oz.
Rising haven flows amid Japan’s fiscal strain
A sharp upswing in Japanese government bond yields—most notably on long-dated debt—intensified worries over the country’s expanding fiscal commitments and whether Prime Minister Sanae Takaichi’s administration can continue funding large-scale spending plans.
Markets were unsettled by reports that Takaichi is preparing a stimulus package far larger than first anticipated, estimated at around 25 trillion yen ($163 billion).
Yields on 20- and 30-year Japanese bonds surged to levels not seen in decades, while the benchmark 10-year yield climbed to its highest reading since the 2008 financial crisis.
Japan’s role as a major global creditor means turbulence in its bond market—especially with investor appetite deteriorating—risks spilling over into global financial conditions.
Geopolitical tensions also added to the unease, as a diplomatic rift with China escalated over Takaichi’s comments on Taiwan, despite Tokyo’s attempts to defuse the situation.
Other precious metals advanced strongly as well: spot platinum rose 0.9% to $1,547.96/oz, while spot silver jumped 1.3% to $51.3825/oz.
Fed outlook and December rate expectations
Uncertainty surrounding the Federal Reserve’s next move continued to underpin gold after recent jobless claims data pointed to persistent weakness in the U.S. labor market.
The mixed signals prompted a modest increase in expectations for a December rate cut, although markets still lean toward the Fed holding rates steady. According to CME FedWatch, traders are assigning a 42.4% probability to a 25-basis-point cut at the Dec. 10–11 meeting, sharply lower than last week’s 62.4%.
Attention now turns to Wednesday’s release of the October meeting minutes. While policymakers overwhelmingly backed a 25-bp cut in that meeting, recent commentary suggests growing internal divisions over whether further easing is appropriate in December.
A prolonged U.S. government shutdown has also created a shortage of fresh economic data, leaving the Fed with less visibility heading into its final meeting of the year — increasing the odds of a cautious pause.
Stable U.S. interest rates typically weigh on non-yielding assets like gold, but ongoing economic uncertainty continues to keep haven demand elevated.