Gold prices climbed in Asian trading Monday, holding near last week’s record peak as investors positioned for deeper U.S. interest rate cuts. Spot gold rose 0.3% to $3,697.70 an ounce, while futures advanced 0.7% to $3,733.10/oz by 01:33 ET (05:33 GMT). Prices touched an all-time high of $3,707.70/oz last week, underscoring strong demand for safe-haven assets.
The Federal Reserve’s 25-basis-point rate cut last week, its first in months, reignited optimism that monetary policy will continue easing into year-end. Lower borrowing costs typically enhance the appeal of non-yielding assets like gold, which face less opportunity cost when rates fall.
However, the U.S. dollar’s rebound from a 3½-year low kept bullion shy of fresh highs, limiting upward momentum for the metal.
Fed Policy Shapes Investor Outlook
The Fed cited growing labor market risks as justification for the cut, while warning that tariff-driven inflationary pressures remain a concern. Markets are nevertheless betting on another 50 basis points of cuts in 2025, according to CME FedWatch data.
A softer policy stance could extend gains for gold and other precious metals:
- Platinum: Up 0.8% to $1,419.90/oz
- Silver: Gained 1.3% to $43.65/oz
- Copper: LME contracts up 0.1% to $10,001.10/ton
These moves reflect broader support across commodities as easing financial conditions bolster demand for metals linked to both investment and industry.
Key U.S. Data in Focus This Week
Investors now turn to U.S. economic data that could determine the Fed’s policy trajectory. The highlight will be Friday’s PCE price index, the central bank’s preferred inflation gauge, expected to show inflation remains sticky above the Fed’s 2% target.
Additional signals include:
- Speeches from multiple Fed officials, with Chair Jerome Powell set to address markets Tuesday.
- Preliminary September PMI surveys, offering insight into business activity.
- Final reading on Q2 GDP growth, providing clarity on economic momentum.
Stronger-than-expected inflation or growth data could temper expectations for aggressive easing, while weaker prints may reinforce bullish sentiment for gold.