Gold surged to fresh record highs Monday as investors piled into bullion, betting that the Federal Reserve will continue cutting rates through year-end while geopolitical tensions keep demand for safe-haven assets elevated.
Spot gold jumped 1.4% to $3,735.40 an ounce by late morning in New York, briefly topping all-time highs after five consecutive weekly gains. U.S. gold futures for December delivery climbed 1.7% to $3,768.70. The rally was reinforced by exchange-traded fund inflows, which jumped 0.9% on Friday - the sharpest increase since 2022, Bloomberg data showed.
"Technicals are looking pretty strong, and expectations are rising for deeper rate cuts," said Soni Kumari, commodity strategist at ANZ Group Holdings Ltd. She added that gold's breakout above $3,708 an ounce signaled "prices will continue to push higher."
The Fed last week delivered its first rate cut since December, trimming its benchmark by 25 basis points and signaling a readiness to ease further as labor market softness and slowing inflation persist. Traders will be focused this week on comments from Fed Chair Jerome Powell and Friday's core personal consumption expenditure price index, the central bank's preferred inflation gauge.
Jim Wyckoff, senior analyst at Kitco Metals, said the rally reflects "a continued flow of safe haven demand amid geopolitical matters that are still kind of wobbly, including the Russia-Ukraine war," coupled with the Fed's dovish shift.
Central bank purchases have also underpinned prices. Societe Generale reported that demand rebounded to 63 tonnes in September, matching post-2022 averages and providing additional support to bullion.
Silver extended its outperformance, surging 1.7% to $43.83 an ounce - its highest level in more than 14 years and putting year-to-date gains above 50%. Options activity spiked Friday, with trading in the iShares Silver Trust topping 1.2 million contracts, the most since April 2024.
Platinum rose 0.8% to $1,398.94 and palladium climbed 2.5% to $1,177.61. Analysts at Heraeus Precious Metals cautioned that gold may be due for a breather after climbing more than 10% in the last five weeks, warning of a potential consolidation period.
