Gold hits another record high, approaches $3,900
What’s happening:-
Gold prices rose to record highs on Monday with growing safe-haven demand.
What happened:-
Expectations of further interest rate cuts by the Federal Reserve and concerns around the US dollar supported gold.
Festive demand from India, stock market volatility and fears of a potential government shutdown in the US provided a further boost to gold prices.
Why it matters:-
Gold has surged more than 43% year to date mainly due to geopolitical concerns. Tariff announcements and war have supported the yellow metal.
Gold prices in Asian trading today
Earlier this month, the US Federal Reserve cut its benchmark interest rates for the first time since December 2024. Policymakers signalling more rate cuts ahead triggered more gold buying. This is because a low-rate environment reduces the opportunity cost of holding the non-yielding yellow metal.
The personal consumption expenditures index report released on Friday showed inflation coming in-line with expectations, raising prospects of rate cuts by the Fed at its upcoming policy meetings this year.
Weakness in the US dollar lent further support to gold prices, as a softer greenback makes metals cheaper for foreign currency holders. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell around 0.2% on Monday.
Today's gold price in dollars
Investors are closely monitoring the risk of a government shutdown in the US, which could delay major data releases, including the much-awaited NFP (nonfarm payrolls) report.
With the Indian festive season of Diwali approaching, consumer demand in the global market has risen sharply.
In other metals trading, silver prices rose to $47.016 per ounce and platinum climbed to $1,632.3. Palladium bucked the trend and settled lower at $1,291.00.
Gold price today
What to watch:-
Investors will keep an eye on negotiations related to the US government slowdown. The release of the NFP report, due this Friday, will also remain in focus. The US economy, which added 22,000 jobs in August, is expected to add 50,000 jobs in September