Gold Reaches New Peak Supported by Expectations of US Interest Rate Cut

SadaNews - Gold has reached an unprecedented new level today, Monday, surpassing $3,600 per ounce, after weak labor market data in the United States bolstered expectations that the Federal Reserve will cut interest rates next week.

Gold rose 1.4% to $3,639.3 per ounce in spot trading by 16:21 GMT.

US gold futures for December delivery increased 0.8% to $3,681.4.

Peter Grant, vice president and senior metals expert at Zaner Metals, stated that the yellow metal may continue to advance toward a range of $3,700 to $3,730 in the near term, and that any pullbacks in the coming period likely represent buying opportunities.

Data released on Friday showed a significant drop in job growth in the United States in August.

The CME Group's FedWatch tool indicates that traders expect a 90% chance of a 25 basis point cut at the end of the two-day monetary policy meeting ending on September 17, with a 10% probability of a larger cut of up to 50 basis points.

A decline in interest rates reduces the opportunity cost of holding non-yielding gold.

Gold prices have surged 38% since the beginning of the year after a 27% increase in 2024, supported by a weak dollar, rising central bank holdings of the metal, a tendency towards monetary easing, and increasing global uncertainty.

As for other precious metals:

Silver rose 1% in spot trading to $41.39 per ounce.

Platinum increased by 0.7% to $1,382.25.

Palladium climbed 2.1% to $1,134.56.

Source: Reuters + Various Websites