Gold Prices Surge to 4-Month High on Fed Cut Hopes and Tariff Uncertainty
Gold prices climbed to their highest level in more than four months during Asian trading on Monday, fueled by growing expectations of a Federal Reserve rate cut this month. Concerns over Fed independence and uncertainty surrounding U.S. trade tariffs also supported demand for the safe-haven metal.
Spot gold rose 0.9% to $3,480.56 an ounce, the strongest since mid-April. Meanwhile, December Gold Futures jumped 1% to $3,551.82 per ounce by 01:55 ET (05:55 GMT). Prices were on track for a fifth straight day of sharp gains, following a nearly 5% rally in August.
In other precious metals, silver prices surged to a 14-year high, adding to bullish sentiment across the sector.
Fed Rate Cut Bets Drive Gold Higher
Investor confidence in a September rate cut increased after the latest U.S. PCE inflation data came in as expected. According to the CME FedWatch tool, markets are pricing in nearly a 90% chance of a 25 basis point cut this month.
Lower borrowing costs reduce the opportunity cost of holding non-yielding assets like gold, making the metal more appealing. Investors are now focused on upcoming U.S. jobs data, with weaker payrolls likely to strengthen the case for policy easing.
Safe-haven demand also grew after a U.S. appeals court ruled that many Trump-era tariffs were illegal, casting doubt over duties on billions of dollars of Chinese imports. The tariffs remain in place until October 14, pending a Supreme Court appeal.
Political tensions around the Fed also weighed on sentiment. President Donald Trump recently attempted to dismiss Federal Reserve Governor Lisa Cook, who has challenged the decision in court.
Silver Hits 14-Year High; China PMI Offers Support
Other metals also rallied. Platinum Futures rose 1.3% to $1,346.65 per ounce, while Silver Futures gained 1.5% to $41.32, reaching their highest since August 2024.
Meanwhile, copper prices were mixed. London Metal Exchange copper held near $9,934.65 a ton, while U.S. Copper Futures edged 0.2% lower to $4.60 a pound.
Chinese economic data added support to industrial metals. A private survey showed factory activity expanding at the fastest pace in five months during August, signaling early signs of improved demand, even as official figures showed ongoing contraction.
