WASHINGTON (dpa-AFX) - Gold prices scaled a fresh record high on Monday as investors factored in a rate cut by the US Federal Reserve as a 'certainty' at the central bank's monetary policy meeting scheduled to begin tomorrow.
Front Month Comex Gold for September delivery jumped by $32.80 (or 0.90%) to $3,682.20 per troy ounce. Today's price is a new record closing high for gold.
Front Month Comex Silver for September delivery rose by 13.00 cents (or 0.31%) to a new 52-week high of $42.517 per troy ounce today.
After a successful rally last week, gold traders today preferred a 'wait-and-watch' approach ahead of a crucially important monetary policy meeting by the US Fed. Investors are anticipating a reduction in borrowing rates as recent jobs and inflation numbers support a rate cut.
Last week's US consumer price data showed that the index rose 2.9% on an annual basis in August. Annual core inflation (more closely watched by Fed) was unchanged at 3.1%. The US Federal Reserve's headline inflation target is 2%.
According to CME Group's FedWatch Tool, investors are betting on a 96.4% chance of a 25-basis-point interest rate cut and a 3.6% chance of a 50-basis-point rate cut. Currently, the benchmark interest rate hovers around 4.25% to 4.50%.
Today, on his social media platform, Truth Social, US President Donald Trump called for Fed Chair Jerome Powell to enact a 'bigger' cut, pointing to the housing market.
Yesterday, after the Trump administration renewed its request in a Federal Appeals Court to fire Fed Governor Lisa Cook over allegations of fraud, traders are doubting the longevity of the central bank's independence.
After Israel's attack on Doha, targeting Hamas leaders, Qatar received support from other Arab leaders. However, Israeli Prime Minister Benjamin Netanyahu has not ruled out further strikes. As of now, the situation though largely calm remains tense.
Russia has ignored calls to stop its war with Ukraine. Trump stated that he was willing to impose tough sanctions on Russia provided European nations match the US measures by stopping buying Russian crude.
Conflict in Europe, brewing tension in the Middle East, and tariff uncertainty supported gold prices on the upside last week.
Analysts believe that gold may remain range-bound in the near-term until clear signals emanate after the US Fed's decision.
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