Gold hits another record high as dollar weakens and Fed rate cuts loom

Gold prices surged to an all-time high on Monday, driven by a weaker US dollar and growing expectations that the Federal Reserve will continue cutting interest rates later this year.

Spot gold rose 0.8 percent to $3,790.39 per ounce at the time of writing, earlier hitting a record high of $3,798.32.

US gold futures for December delivery climbed 0.3 percent to $3,818.30.

The dollar index eased 0.2 percent against other major currencies, making bullion less expensive for overseas buyers.

The safe-haven metal thrives in a low-interest-rate environment and amid geopolitical or economic uncertainty.

Fed rate cut bets support bullion

Investors are increasingly pricing in a 90 per cent probability of a Fed rate cut in October, with a roughly 65 per cent chance of another cut in December, according to the CME FedWatch Tool.

US economic data released Friday showed the Personal Consumption Expenditures Price Index rose 0.3 percent in August, in line with economists’ expectations, after a 0.2 percent increase in July.

Traders will monitor comments from several Federal Reserve officials on Monday, including Fed Governor Christopher Waller, Cleveland Fed President Beth Hammack, St. Louis Fed President Alberto Musalem, New York Fed President John Williams, and Atlanta Fed President Raphael Bostic.

Hawkish remarks could strengthen the dollar and put downward pressure on gold and other USD-denominated commodities.

Silver, Platinum, and Palladium also gain

Other precious metals also rose as investors sought safety.

Spot silver increased 1 percent to $46.47 per ounce, platinum climbed 2.6 percent to $1,608.90, and palladium gained 1.4 percent to $1,287.19.

Holdings of the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.89 percent to 1,005.72 tonnes on Friday from 996.85 tonnes on Thursday.

US shutdown risks weigh on markets

Share markets in Asia opened cautiously on Monday as investors braced for a potential US government shutdown, which would delay the release of September payroll data and other critical economic indicators.

President Donald Trump is scheduled to meet congressional leaders later on Monday to discuss extending government funding.

Without a deal, a shutdown would begin Wednesday—the same day new US tariffs on heavy trucks, pharmaceuticals, and other goods are set to take effect.

Analysts at Bank of America noted that a prolonged closure could leave the Federal Reserve “flying blind” when it meets on October 29.

“If the shutdown lasts beyond the Fed meeting, the Fed will rely on private data for its policy decisions. On the margin, we think this may lower the likelihood of an October cut, but only marginally,” they wrote.