WASHINGTON: Gold prices soared to fresh all-time highs on Monday, lifted by a weaker dollar and mounting expectations that the US Federal Reserve will push ahead with interest rate cuts later this year.
Spot gold rose 0.8 percent to $3,789.39 an ounce as of 0251 GMT after touching a record $3,798.32 earlier in the session. US gold futures for December delivery also gained ground, inching up 0.3 percent to $3,818.30.
The dollar index slipped 0.2 percent against major currencies, making bullion priced in the greenback cheaper for international buyers. Analysts say the softer dollar, along with signs of cooling inflation, has strengthened the case for lower rates.
Hopes of Fed easing fuel momentum
Data released by the US Commerce Department last week showed its Personal Consumption Expenditures (PCE) Price Index rose 0.3 percent in August, in line with expectations. Analysts argue that the steady reading has reinforced bets that the Fed will act in October and possibly again in December.
“That benign inflation print in the United States has given the markets reason to believe further Fed cuts are coming in October and December,” said Kyle Rodda, analyst at Capital.com. “Sentiment is very bullish and we are on track to retest another record high this week.”
Traders now see a 90 percent chance of a Fed rate cut in October and around 65 percent odds of another in December, according to the CME FedWatch Tool.
Gold, often viewed as a safe-haven asset, tends to shine in low interest rate environments and during times of political or economic uncertainty. Stock markets in Asia opened cautiously on Monday as investors braced for the possibility of a US government shutdown, further underpinning bullion’s appeal.
Adding to the bullish tone, holdings in the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, climbed nearly 0.9 percent to 1,005.72 tonnes on Friday.
Other precious metals also gained, with spot silver up 1 percent at $46.47 per ounce, platinum jumping 2.6 percent to $1,608.90, and palladium advancing 1.4 percent to $1,287.19.
Local market follows global rally
In Pakistan, domestic gold prices tracked the international surge. On Saturday, the price of 24-karat gold per tola increased by Rs1,900 to reach Rs397,700, according to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA).
The price of 10 grammes of gold rose by Rs1,629, closing at Rs340,963. The rise came after a brief dip on Friday, when rates had slipped by Rs1,000 to Rs395,800 per tola.
With global momentum strong and investor sentiment upbeat, jewellers and market watchers expect bullion to remain on a firm footing in the days ahead.
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