Gold Prices Edge Higher, Stay Near Record Highs on Fed Rate Cut Optimism
Gold prices rose in Asian trade on Monday, holding close to last week’s record highs as expectations of further U.S. interest rate cuts supported demand for bullion.
The outlook for gold remains upbeat ahead of several key U.S. economic data releases this week, including the Fed’s preferred inflation gauge. However, strength in the dollar, which rebounded from its weakest level in more than three years, kept prices below record levels.
Spot gold gained 0.3% to $3,697.70 per ounce, while gold futures rose 0.7% to $3,733.10 per ounce by 01:33 ET (05:33 GMT). Spot prices touched a peak of $3,707.70 last week, their strongest level ever.
Fed Cut Boosts Bullion Outlook
The latest rally followed the Federal Reserve’s decision to cut rates by 25 basis points last week, citing growing risks to the labor market. The central bank also signaled it may continue lowering rates in the coming months if job data weakens further.
At the same time, the Fed warned of ongoing inflationary risks, particularly from higher trade tariffs. Still, markets are pricing in at least another 50 basis points of cuts this year, according to CME FedWatch.
Lower interest rates typically benefit gold and other non-yielding assets, as they reduce the opportunity cost of holding precious metals. Broader metal markets also gained after the Fed’s move.
Spot platinum climbed 0.8% to $1,419.90 per ounce, while spot silver added 1.3% to $43.65 per ounce. In industrial metals, LME copper futures edged up 0.1% to $10,001.10 a ton, while COMEX copper gained 0.1% to $4.6315 per pound.
Key US Data and Fed Speeches Ahead
This week, investors will closely monitor several U.S. economic releases that could influence expectations for further Fed cuts. Multiple Fed officials are scheduled to speak, with Chair Jerome Powell set to deliver remarks on Tuesday.
On Friday, the core PCE price index, the Fed’s preferred inflation measure, is due and is expected to show inflation holding steady above the 2% annual target. Other key reports include preliminary PMI data for September and a final reading of second-quarter GDP growth.
