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Gold prices surged to a record high in Asian trading on Monday, driven by heightened speculation that the Federal Reserve may cut interest rates more aggressively later this week. Adding to the bullish sentiment for safe-haven assets were reports of a second assassination attempt on Republican presidential nominee Donald Trump, which, although thwarted, spurred demand for gold.
Gold Prices Surge Amid Rate Cut Bets
Spot gold rose by 0.4%, reaching an all-time high of $2,589.02 an ounce, while December gold futures edged up by 0.1% to $2,613.70 an ounce. The increase in gold prices was bolstered by a softer U.S. dollar, as market participants awaited the Federal Reserve’s meeting this Wednesday.
The Federal Reserve is widely expected to cut interest rates, but traders are split between a 25 and 50 basis point reduction, according to CME’s FedWatch tool. Both options carry a 50% likelihood, with the case for a more significant rate cut strengthening due to concerns over a weakening U.S. labor market.
With expectations of an extended easing cycle, analysts forecast at least 100 basis points of rate cuts by year-end. Lower interest rates tend to favor gold, as they reduce the opportunity cost of holding non-yielding assets like precious metals.
Safe-haven demand for gold was further fueled by news of a second assassination attempt on Donald Trump, this time at his Florida golf course. The attack was foiled by Secret Service agents in a shootout, with Trump unharmed and the assailant apprehended. While the incident briefly rattled markets, Trump quickly reassured supporters in a message on his fundraising website.
In addition to gold, other precious metals benefited from the shifting market sentiment. Platinum futures rose 0.4% to $1,004.80 an ounce, and silver futures increased by 0.8% to $31.332 an ounce, reflecting the broader demand for safe-haven assets as investors prepared for a potential easing cycle from the Fed.
