Gold futures notched another record high on Friday as lower Treasury yields and a falling US dollar supported the precious metal. Gold prices registered more than two dozen record settlements in 2024 and could reach $2,700 before the year’s end.
December gold futures surged $26.20, or 1.02%, to $2,607.00 per ounce at 13:48 GMT on Friday on the COMEX division on the New York Mercantile Exchange. Gold will post a weekly gain of around 3.2%, lifting its year-to-date rally to roughly 26%.
Silver, the sister commodity to gold, joined the rally to finish the trading week. October silver futures rocketed $0.993, or 3.3%, to $31.10 an ounce. The white metal will record a weekly gain of 10%, adding to its year-to-date increase of 30%.
Federal Reserve policy fired up gold’s rapid ascent. The US central bank is expected to cut interest rates at next week’s Federal Open Market Committee (FOMC) policy meeting. The entity could also signal more rate cuts over the next 15 months in its updated Summary of Economic Projections.
Meanwhile, other advanced central banks, such as the European Central Bank (ECB), are planning to loosen monetary policy heading into 2025.
But while investors are baking in lower interest rates into the cake, traders are debating how aggressive the Fed will be. The CME FedWatch Tool indicates that the futures market is split on whether the institution will follow through on a quarter-point or half-point rate reduction to kick off its next easing cycle.
Either way, a falling-rate environment is beneficial for gold because it reduces the opportunity cost of holding non-yielding bullion.
“The market is still expecting the Fed to cut interest rates by around 100 basis points by the end of the year, i.e. rates would have to be cut by 50 basis points at one of the two remaining meetings after September,” Commerzbank analysts said. “It is therefore likely due to these aggressive interest rate cut expectations for the coming months that the gold price is rising.”
Additionally, the US dollar weakened on Friday, which is also bullish for dollar-denominated assets because it makes it cheaper for foreign investors to purchase.
In other metal markets, October copper futures rose $0.0435, or 1.04%, to $4.239 per pound. October platinum futures gained $25.70, or 2.62%, to $1,008.00 an ounce. October palladium futures tacked on $20.70, or 1.97%, to $1,069.50 per ounce.