Gold prices in the country may increase again. These days the price of the dollar is weakening. This week the US Federal Reserve has cut interest rates. After this cut, gold prices reached a record high on Monday. Spot gold rose 0.5% to $2,588.29 an ounce after touching an all-time high of $2,589.23 earlier this session.
U.S. gold futures were up 0.2% at $2,615.80. Trading conditions have been poor because of holidays in China, Japan, Indonesia, Malaysia and South Korea. The dollar fell 0.2%, making gold cheaper for other currency holders. “The prospect of the Fed wielding the axe by cutting rates by 50 basis points this week has sent gold and the dollar in opposite directions,” said Tim Waterer, chief market analyst at KCM Trade.
“The overall conditions for gold remain favorable, and there is potential for further upside. If the dollar continues its downward trend, gold could reach $2,700 by the end of the year.” All eyes will be on the Fed this week as speculation grows about the extent of interest rate cuts and the pace of future reductions at its September 17-18 monetary policy meeting. The Bank of England and the Bank of Japan are also announcing policy decisions later this week.
According to the CME FedWatch tool, markets are currently pricing in a 59% chance of a 50-bps rate cut on Wednesday. This would be the Fed’s first rate cut since 2020. Data released on Friday showed that US consumer sentiment improved in September due to easing inflation, although Americans remained cautious ahead of the presidential elections in November.
Zero-yielding gold has become a favorite investment amid low interest rates and geopolitical turmoil. A second assassination attempt was made on Republican presidential candidate Donald Trump on Sunday, according to the FBI. Spot silver rose 1.2% to $31.02 an ounce, its highest level in two months. Platinum climbed 0.4% to $999.38 and palladium rose 0.7% to $1,075.60.
