Gold Rises to Four-Month High as Fed Rate Cut Bets Strengthen
Gold prices climbed to their highest level in more than four months on Monday, supported by growing expectations that the U.S. Federal Reserve will cut interest rates at its upcoming meeting this month.
In spot trading, gold advanced 0.8% to $3,475.72 per ounce , reaching its strongest level since April 23. U.S. gold futures for December delivery also gained 0.9% to settle at $3,546.10 per ounce.
Dollar Weakness Provides Support
The rally was fueled in part by pressure on the U.S. dollar, after a court ruling declared most of the tariffs imposed by the previous administration illegal. A weaker dollar typically boosts demand for precious metals, giving gold additional momentum.
Meanwhile, U.S. economic data showed that the Personal Consumption Expenditures (PCE) Price Index rose 0.2% month-on-month and 2.6% year-on-year, in line with forecasts. Although inflation remains steady, risks surrounding the U.S. labor market have reinforced bets on a 25 basis point rate cut by the Federal Reserve this month.
Silver Surges to 13-Year High
Silver saw a sharp rally, jumping 2% in spot trading to $40.44 per ounce, its highest level since September 2011.
Performance of Other Precious Metals
- Platinum gained 0.8% to $1,375.41 per ounce.
- Palladium rose 1.1% to $1,121.09 per ounce.
Market Liquidity and Outlook
Thin liquidity, due to the U.S. holiday, amplified price movements in precious metals, adding further momentum to gold and silver. With markets closely watching the Federal Reserve’s next decision, the outlook for gold remains firmly tied to interest rate policy and the trajectory of the U.S. dollar.
