- CME trading halt affects FX, commodities, equities futures
- Investors see 85% chance of a rate cut in December
- US dollar heads for worst week since late July
- All metals headed for weekly and monthly gains
Nov 28 (Reuters) - Spot gold prices climbed on Friday and were poised for a fourth straight monthly rise, bolstered by investor optimism that the Federal Reserve would cut interest rates in December, while an outage at exchange operator CME Group halted futures trading.
An outage at CME Group stopped trade on its currency platform and in futures spanning foreign exchange, commodities, Treasuries and stocks. U.S. gold futures for December delivery were at $4,221.30 per ounce ahead of the outage.
"The main impact has been a significant widening of OTC (over the counter) spreads as futures liquidity has disappeared," said Nicholas Frappell, global head of institutional markets at ABC Refinery.
Spot gold rose 0.7% to $4,185.34 per ounce by 0717 GMT, hitting its highest since November 14, and was set for a 3% weekly gain. Bullion is set to register a 3.9% rise this month.
"Trading conditions are looking a bit thin liquidity-wise, which is exacerbating some of the market moves. A lot of the moves higher in gold are due to pre-positioning in anticipation of a lower interest rate environment," said KCM Trade Chief Market Analyst Tim Waterer.
Traders are pricing in an 85% chance of a rate cut in December, up from 50% a week earlier.
Comments from San Francisco Fed President Mary Daly and Fed Governor Christopher Waller this week have bolstered expectations for a rate cut next month.
Like U.S. President Donald Trump, Kevin Hassett, who has emerged as a frontrunner to replace Jerome Powell as Federal Reserve Chair, also said interest rates should be lower.
Non-yielding gold tends to perform well in low-interest-rate environments.
The U.S. dollar was headed for its worst week since late July. A weaker greenback makes dollar-priced gold more attractive for buyers using other currencies.
Elsewhere, spot silver rose 1% to $53.98 per ounce and platinum gained 2.3% to $1,645.60, with silver up 7.9% and platinum 8.9% for the week, respectively. Palladium lost 0.4% to $1,433.20 but was set for a 4.3% weekly gain.
Reporting by Ishaan Arora; additional reporting by Anushree Mukherjee and Swati Verma; Editing by Subhranshu Sahu, Sonia Cheema and Mrigank Dhaniwala
Source: Reuters