Gold Prices Hit New Highs as Fed Speculation Rises
Gold prices rose to a more than four-month high on Monday (September 1st), boosted by hopes for a Federal Reserve interest rate cut this month and signs of a weaker dollar.
Spot gold rose 0.6% to $3,468.85 an ounce, its highest level since mid-April. December gold futures jumped 0.7% to $3,539.62 an ounce at 6:06 a.m. ET (10:06 a.m. GMT). Gold posted a five-day rally, after surging nearly 5% in August.
In other metals markets, silver prices surged to a 14-year high.
Expectations of a September interest rate cut strengthened after the latest US personal consumption expenditures price index last week largely matched expectations.
Expectations then grew that the Fed would prioritize supporting the potentially weakening labor market despite concerns over lingering inflationary pressures. According to the CME FedWatch tool, the market is pricing in a nearly 90% chance of a 25 basis point interest rate cut later this month.
Lower borrowing costs reduce the opportunity cost of holding non-yielding assets like gold, making it more attractive to investors.
Attention now turns to US employment data due on Friday. A weak or tepid non-farm payrolls report could strengthen the case for near-term easing, analysts say.
The safe-haven flow into gold is also driven by trade policy uncertainty. A US appeals court last week struck down many of President Donald Trump's massive tariffs, raising questions about the future of duties on hundreds of billions of dollars of Chinese imports.
The court kept interest rates in place until October 14 to give the Trump administration time to appeal to the US Supreme Court.
Investors also remain wary of signs of political pressure on the US central bank. President Donald Trump last week attempted to dismiss Federal Reserve Governor Lisa Cook, citing alleged mortgage fraud in 2021.
Cook has rejected Trump's authority to dismiss her and has filed a lawsuit challenging the dismissal.
Other precious metals also rose on Monday, with platinum futures rising 2.4% to $1,403.30/oz.
Silver futures jumped 1.8% to $41,458/oz, hitting their highest level since August 2024.
Benchmark copper futures on the London Metal Exchange rose. A private survey in China – the world's largest copper importer – showed on Monday that factory activity expanded at the fastest pace in five months in August amid easing US-China trade concerns. (ayu)
Source: Newsmaker.id
