Introduction to Gold’s Recent Surge
Gold reached a new historical high on Monday, driven by investors’ growing expectations of further interest rate cuts from the Federal Reserve (Fed), as they await statements from several Fed officials and crucial inflation data to be released this week.
Gold’s Current Price
At 3:50 a.m. CDMX time, spot gold was up by 1.1%, trading at $3,723.81 per ounce after hitting a new all-time high of $3,726.19 earlier in the session.
Gold futures in the U.S. for December delivery were also up by 1.4%, trading at $3,758.4 per ounce.
Expert Analysis and Upcoming Events
Giovanni Staunovo, an analyst at UBS, stated, “I expect gold to reach new historical highs this week, as Fed officials are likely to signal further rate cuts. However, the pace and magnitude of these reductions will depend on upcoming data.”
This week, several Fed officials are scheduled to speak, with Fed Chair Jerome Powell delivering a speech on Tuesday. Investors are closely monitoring their comments for clues about the future direction of monetary policy.
Additionally, the market will be watching for the release of U.S. personal consumption expenditure (PCE) prices on Friday, seeking signals about the pace of future interest rate cuts.
Last week, the Fed made its first rate cut since December, reducing it by 25 basis points and signaling openness to further policy easing.
Investor Expectations for Future Rate Cuts
Investors anticipate two more rate cuts of 25 basis points this year, one in October and another in December, with probabilities of 93% and 81%, respectively, according to the CME’s FedWatch tool.
Performance of Other Precious Metals
Silver was up by 1.4%, trading at $43.67 per ounce, its highest level in 14 years.
Platinum gained 0.8%, trading at $1,415.09 per ounce.
Palladium advanced 1.9%, trading at $1,170.63 per ounce.
Key Questions and Answers
- What is driving gold’s recent surge? Investors’ growing expectations of further interest rate cuts from the Federal Reserve (Fed) are driving gold’s recent surge.
- Who are the key Fed officials speaking this week? Several Fed officials are scheduled to speak this week, with Fed Chair Jerome Powell delivering a speech on Tuesday.
- What data will the market be watching for this week? The market will closely monitor the release of U.S. personal consumption expenditure (PCE) prices on Friday for signals about the pace of future interest rate cuts.
- What are investor expectations for future Fed rate cuts? Investors anticipate two more rate cuts of 25 basis points this year, one in October and another in December.
- How are other precious metals performing? Silver is trading at its highest level in 14 years, platinum is up by 0.8%, and palladium has advanced by 1.9%.
