Beijing: Gold prices edged higher on Monday as investors reacted to growing expectations of U.S. interest rate cuts and awaited key U.S. economic data alongside upcoming U.S.-China trade negotiations. Spot gold rose modestly by 0.1% to $4,253.33 per ounce, while U.S. December gold futures surged 1.3% to $4,266.30 per ounce. Spot silver also climbed 0.5% to $52.12 per ounce, recovering from a 4.4% drop on Friday, which marked its worst session since early April.
Analysts noted that the market was stabilizing after last week’s turbulence. “The gold market is trying to find its footing after Friday's selloff. Sentiment is normalising after a few weeks of mania,” said Kyle Rodda of Capital.com. The previous day’s 1.8% decline in gold was triggered by comments from former U.S. President Donald Trump, who indicated that his proposed 100% tariff on Chinese imports was unsustainable and signaled an intent to meet Chinese President Xi Jinping, easing trade tensions temporarily.
Looking ahead, the market is closely watching this week’s U.S.-China trade talks and Friday’s U.S. Consumer Price Index (CPI) release. Forecasts suggest that U.S. core inflation remained steady at 3.1% in September, leaving the Federal Reserve room to proceed with anticipated rate cuts. Investors have largely priced in a 25 basis-point reduction this month, with expectations of another in December, bolstering the appeal of non-yielding assets like gold.
Gold has already seen a dramatic surge this year, gaining more than 60% and reaching an all-time high of $4,378.69 last week, driven by geopolitical tensions, aggressive rate-cut bets, central bank purchases, de-dollarisation trends, and strong inflows into exchange-traded funds. Meanwhile, other precious metals showed mixed performance: platinum fell 0.8% to $1,596.88 per ounce, while palladium inched up 0.2% to $1,476.97 per ounce.
The combination of monetary policy expectations, inflation data, and international trade developments continues to position gold as a key hedge for investors navigating global economic uncertainties.