Gold Surges Past $3,800/oz on Weaker Dollar and Rate-Cut Expectations
Gold jumps above $3,800/oz as weaker dollar and Fed rate-cut expectations boost safe-haven demand. Silver, platinum, and palladium also rise amid market uncertainty.
Gold bangles displayed at a Mumbai jewellery store as global gold prices soar above $3,800/oz amid softer dollar and Fed rate-cut bets.
Gold prices soared to new records above $3,800 an ounce on Monday with the dollar easing and growing expectations of further rate cuts later in the year by the Federal Reserve.
Spot gold was up 1.5% to trade at $3,814.91 an ounce by 6:24 GMT, while U. S. gold futures for December delivery gained 0.9% to $3,844.
The dollar fell by some 0.2% against the major currencies, thereby furthering what has already been a rally wherein bullion-denominated overseas buyers now find more affordability.
Rate-Cut Speculation Fueled by Inflation Data
The U. S. Commerce Department announced on Friday that, while beneath economists' expectations, the Personal Consumption Expenditures (PCE) Price Index rose by 0.3% in August, having gone 0.2% in July.
According to Kyle Rodda, an analyst at Capital.com: 'This benign inflation data gives markets reason to anticipate additional Fed rate cuts in October and December. Sentiment is very bullish and gold could test new record highs this week. However, the market's long positioning suggests some caution for further upside.'
As per CME FedWatch Tool data, the market rates the chance of a Fed rate cut in October at 90%, with about 65% chance for another such reduction in December.
Safe-Haven Demand Supports Bullion
Lowering interest rate levels and offering economic uncertainties could be adverse factors for gold. Asian stocks began cautiously on Monday, with investors waiting against the potential backdrop of a U. S. government shutdown.
Remaining U. S. data, including job openings, private payrolls, ISM manufacturing PMI, and non-farm payrolls, will further imprint their effects on the movement of gold.
The biggest gold-backed ETF, SPDR Gold Trust, announced a 0.89% increase in holdings for Friday of 1,005.72mt from Thursday's 996.85mt.
Other Precious Metals
Silver was up 2.3% at $47.04/oz
Platinum surged 3.6% to $1,623.88/oz
Palladium edged up 2% to $1,295.19/oz
Surges in gold and other precious metals show more and more investors seeking refuge as uncertainty continues in economic and financial markets.
