Gold Surges Above $3,800/Oz To Record High Amid Rate Cut Speculation And Geopolitical Concerns
Gold prices broke through $3,800 per oz for the first time on Monday (September 29th), hitting a record high. Expectations of a US interest rate cut and concerns about a potential government shutdown fueled demand for safe-haven assets amid rising geopolitical uncertainty.
Spot gold jumped 1.5% to $3,815.49 per oz at 10:52 GMT, after reaching $3,819.59 earlier in the session. US gold futures for December delivery rose 1% to $3,845.70.
The US dollar index fell 0.2%, making dollar-priced bullion cheaper for overseas buyers. "Some people describe gold as the accumulation of all fears, both economic and political, and it's pretty clear that we have issues on both sides right now," said independent analyst Ross Norman.
US President Donald Trump will meet with Democratic and Republican leaders in Congress on Monday evening to discuss extending government funding. Without a deal, a government shutdown will begin Wednesday.
Meanwhile, Russia launched hundreds of drones and missiles at Kyiv and other parts of Ukraine early Sunday, in one of the longest attacks on the capital since the full-scale war began.
The US Personal Consumption Expenditures Price Index (PPI) on Friday matched expectations, reinforcing bets on further Federal Reserve interest rate cuts at its October and December meetings.
"With the Fed expected to cut rates further over the next six months, I think there's more upside potential for the yellow metal, targeting the $3,900/oz level," said UBS analyst Giovanni Staunovo. Gold, a safe-haven asset that tends to perform well in low-interest-rate environments, has risen 45% this year, supported by strong central bank buying, a rise in gold ETFs, a weak dollar, and retail investor demand.
Many brokers are optimistic about a gold price rally. Elsewhere, spot silver rose 2% to $46.90 an ounce, reaching its highest level in more than 14 years, while platinum rose 0.9% to $1,583, its highest level in 12 years, and palladium held steady at $1,269.
"(Silver and platinum group metals) are responding to two main factors: increased industrial activity due to interest rate cuts and increased inventory levels as countries seek to ensure adequate availability amid supply chain uncertainty," Norman said. (alg)
Source: Reuters
