New York: Gold prices held firm near historic highs on Monday, reflecting heightened investor anticipation over future U.S. Federal Reserve policy decisions. The precious metal has been drawing attention as a safe-haven asset amid global economic uncertainties and persistent inflationary pressures.
Spot gold rose 0.7% to $3,709.29 per ounce, reaching an intraday high of $3,711.55, while U.S. gold futures for December delivery climbed 1% to $3,743.40. Market participants attributed the surge to expectations of further interest rate cuts by the Federal Reserve following its recent 25 basis point reduction. Analysts note that lower rates tend to reduce the opportunity cost of holding non-yielding assets like gold, fueling demand.
Financial markets are currently pricing in two additional rate cuts of 25 basis points each, expected in October and December, with probabilities of 93% and 81%, respectively, according to the CME FedWatch Tool. Investors are closely monitoring upcoming inflation data and speeches from Fed officials, including Chair Jerome Powell, for guidance on the central bank’s next moves. Analysts warn that any shift in Fed messaging could trigger short-term volatility, but gold’s medium-term outlook remains positive.
Central bank purchases have continued to support gold prices, as institutions diversify reserves in response to economic uncertainty. The combination of strong demand from official institutions and private investors seeking a hedge against inflation and currency fluctuations has strengthened the metal’s upward trajectory.
Other precious metals also posted gains on Monday. Silver rose 1.3% to $43.64 per ounce, approaching a 14-year high, while platinum climbed 1.2% to $1,420.48. Palladium advanced 1.2% to $1,163.24. Market experts highlight that these gains reflect broader investor confidence in precious metals amid expectations of continued global monetary easing.
As markets await further guidance from the Federal Reserve and key economic indicators, gold and other precious metals remain at the forefront of investor attention. Analysts predict that, if the Fed follows through on anticipated rate cuts, gold could continue its climb, potentially setting new all-time highs and reinforcing its role as a hedge against economic and geopolitical uncertainty.