Gold holds firm near record high as markets eye Fed policy signals

Gold hovered near a record high on Monday as investors braced for a slew of speeches from U.S. Federal Reserve officials and inflation data this week, after the central bank cut interest rates last week and signalled potential further easing.

Spot gold edged up 0.1% to $3,688.76 per ounce by 0217 GMT. Bullion hit a record high of $3,707.40 on Wednesday.

U.S. gold futures for December delivery climbed 0.5% to $3,723.70.

“Gold is back on the doorstep of the $3,700 level and new high watermarks could be hit this week if U.S. macro data continues to support the dovish Fed narrative,” KCM Trade Chief Market Analyst Tim Waterer said.

Gold gains as Powell’s comments fuel rate cut hopes

Market focus has shifted to the release of the U.S. core Personal Consumption Expenditure (PCE) price index, the central bank’s preferred inflation gauge, on Friday.

“The combination of a dovish Fed and constant central bank buying is keeping momentum on the side of gold,” Waterer said.

At least a dozen Fed officials are scheduled to speak this week, including Chair Jerome Powell on Tuesday, as markets look for further insights into the central bank’s monetary policy outlook.

The Fed cut interest rates by 25 basis points on Wednesday while cautioning about persistent inflation, casting doubt over the pace of future easing.

New Fed Governor Stephen Miran on Friday defended himself as an independent policymaker after dissenting in favour of steep rate cuts at Wednesday’s policy meeting.

Investors are broadly expecting two more rate cuts this year — 25 bps each in October and December — with probabilities of 93% and 81%, respectively, according to the CME FedWatch tool.

Bullion, which typically performs well in a low-interest-rate environment, has risen more than 40% this year, driven by broader geopolitical and economic uncertainty, central bank buying, and monetary policy easing.

Spot silver rose 0.3% to $43.20 per ounce, hovering near a 14-year high. Platinum eased 0.4% to $1,398.40 and palladium rose 0.1% to $1,150.75.