Gold prices extended their rally on Monday, climbing to levels last seen in mid-April. Spot gold rose 0.6% to $3,468.85 per ounce, while December futures advanced 0.7% to $3,539.62. The rally marked five straight days of gains, with prices up nearly 5% in August alone.
Driving the surge are mounting expectations that the Federal Reserve will trim interest rates at its September meeting. The CME FedWatch tool shows markets pricing in nearly a 90% chance of a 25-basis-point cut. Lower borrowing costs diminish the appeal of interest-bearing assets, making non-yielding gold comparatively more attractive.
At the same time, the dollar has softened, adding further support to the precious metal. Investors are now focused on U.S. non-farm payrolls data due Friday, which could solidify the case for near-term easing.
Inflation, Labor Market and Fed Signals
The Federal Reserve’s preferred inflation gauge—the Personal Consumption Expenditures Price Index—came in broadly in line with forecasts last week. That outcome bolstered wagers that policymakers may prioritize stabilizing a cooling labor market over battling lingering inflationary pressures.
Beyond monetary policy, political developments have fueled uncertainty. A U.S. appeals court recently rejected large portions of former President Donald Trump’s tariff regime, raising doubts over the future of duties on hundreds of billions of dollars in Chinese imports. Although the court allowed tariffs to remain in effect until mid-October, the decision underscored policy volatility.
Additional pressure surfaced after Trump attempted to remove Federal Reserve Governor Lisa Cook, alleging past mortgage fraud. Cook has denied the allegations and launched legal action to challenge the attempted dismissal, highlighting growing political strains around the central bank’s independence.
Precious Metals See Broad Gains
Other metals also advanced alongside gold:
- Silver surged 1.8% to $41.46 an ounce, its highest level since August 2024 and a 14-year milestone.
- Platinum rose 2.4% to $1,403.30 per ounce.
- Copper prices strengthened after a private Chinese survey showed factory activity expanding at its fastest pace in five months, suggesting improved industrial demand.
Safe-haven demand, combined with signs of stronger industrial activity, has positioned precious and industrial metals for continued momentum heading into September.