Gold futures set a fresh record high to kick off the trading week, supported by expectations of more interest rate cuts in the coming months. The yellow metal keeps trending higher, although market watchers say gold prices could endure some bumps along the way as traders price in the magnitude and number of cuts.
December gold futures soared 1.4% to $3,758.40 per ounce on Monday on the COMEX division of the New York Mercantile Exchange. Gold prices have rocketed more than 43% this year and are poised for double-digit gains for September.
Silver, the sister commodity to gold, firmed above $44. October silver futures rose $0.076, or 0.17%, to $44.29 per ounce in overnight trading, reaching a 14-year high. The white metal has performed even better than gold, soaring 15% in September and more than 51% year-to-date.
“I would expect gold to reach new record highs this week with Fed officials likely to indicate further rate cuts, but also being data dependent on the pace and magnitude of cuts,” UBS analyst Giovanni Staunovo told CNBC.
The Federal Reserve cut interest rates last week for the first time since December, lowering the benchmark federal funds rate. While traders had anticipated a more aggressive rate-cutting cycle, the Fed signaled a conservative outlook.
Still, investors remain bullish on gold because rates are expected to continue declining, albeit at a gradual pace.
Echoing the Fed’s Summary of Economic Projections, investors are pricing in two more quarter-point rate cuts this year in October and December.
In the meantime, traders are homing in on key economic indicators, including the August Personal Consumption Expenditures (PCE) Price Index. It is expected to tick up to 2.8% on a 12-month basis.
The future is shining, according to Staunovo. “We continue to see further upside, with gold expected to reach $3,900 by mid-2026,” Staunovo said.
In other metal markets, October copper futures rose $0.019, or 0.41%, to $4.5995 per pound. October platinum futures ticked up $2.20, or 0.15%, to $1,427.90 an ounce. October palladium futures jumped $5.70, or 0.47%, to $1,219.00 per ounce.