BENGALURU: Gold hit a more-than-four-month high on Monday to trade around USD30 shy of all-time highs, buoyed by US Federal Reserve rate cut bets and a softer dollar, while silver breached USD40 per ounce for the first time since 2011.
Spot gold was up 0.7 percent at USD3,471.28 per ounce by 1141 GMT, its highest since April 22, when it touched a record USD3,500.05. US gold futures for December delivery gained 0.8 percent to USD3,543.70.
Spot silver jumped 2.1 percent to USD40.49 per ounce, its highest since September 2011. The US dollar was trading near its lowest since July 28 against a basket of major currencies, making dollar-priced bullion cheaper for overseas buyers. “Gold, and especially silver, extended Friday’s strong gains, supported by sticky US inflation, weakening consumer sentiment, (expected) rate cuts ... and concerns over Fed independence,” said Saxo Bank’s head of commodity strategy, Ole Hansen.
The US personal consumption expenditures price index rose 0.2percent month-on-month and 2.6 percent year-on-year, in line with expectations, data showed on Friday. “Silver is making a move higher in response to expectations of lower rates, while a tight supply market is helping to maintain an upward bias,” said KCM Trade’s chief market analyst, Tim Waterer.
Gold reached a record price of USD3,468.80 at the LBMA exchange’s morning auction, while silver notched up a 14-year auction high of USD40.75, the LBMA said. San Francisco Federal Reserve Bank President Mary Daly reiterated her support for a rate cut, citing labour market risks.
“The market is watching for Friday’s US job market report, anticipating that this would allow the Fed to resume rate cuts from September onwards,” said UBS analyst Giovanni Staunovo.
August non-farm payrolls are expected to have grown by 78,000 jobs, a Reuters poll showed, versus 73,000 in July.
Non-yielding gold typically performs well in a low-interest-rate environment. Meanwhile, US Trade Representative Jamieson Greer said on Sunday that President Donald Trump’s administration was continuing talks with trade partners despite a US court ruling that most of the tariffs are illegal. Elsewhere, platinum gained 2.4 percent to USD1,397.49 and palladium added 0.8percent for USD1,117.98.