Gold hits new record highs; Fed speakers, inflation data in focus

Investing.com-- Gold prices rose Monday, touching new record highs as the prospect of more U.S. interest rate cuts after the Federal Reserve’s recent move buoyed the outlook for bullion.

At 08:40 ET (12:40 GMT), Spot gold rose 0.8% to $3,715.37 an ounce, having climbed as high as $3,728.43, a new record high, earlier in the session, while gold futures rose 1.1% to $3,748.10/oz. 

Gold hit new record high amid rate cut cheer 

Gold’s record high followed the decision by the U.S. Federal Reserve to cut interest rates by 25 basis points last week in a widely telegraphed move.

The central bank cited increasing risks to the labor market as a motivator for the cut, and signaled that it will continue to lower rates in the coming months on more signs of labor weakness. 

The Fed maintained concerns over potential inflationary risks from higher trade tariffs, but the markets remained confident that interest rates will fall by at least 50 bps more this year, CME Fedwatch showed.

Lower rates bode well for non-yielding assets such as gold, given that they lower the opportunity cost of investing in the sector. Broader metal prices also advanced after the Fed’s cut. 

Spot platinum rose 0.3% to $1,421.00/oz, while spot silver rose 1.8% to $43.718/oz. 

Among industrial metals, benchmark copper futures on the London Metal Exchange traded largely unchanged at $9,992.35 a ton, while COMEX copper futures was also flat at $4.6265 a pound. 

U.S. inflation, Fedspeak in focus this week 

The focus this week is on a slew of key U.S. economic signals, which are likely to factor into near-term expectations for interest rate cuts.

Several Fed officials are set to speak this week, most notably Fed Chair Jerome Powell on Tuesday.

PCE price index data– the Fed’s preferred inflation gauge– is due on Friday, and is expected to show inflation remaining sticky in August. Core PCE inflation is also expected to remain above the Fed’s 2% annual target. 

Other economic prints are also due this week, including preliminary purchasing managers index data for September, as well as a final reading on second-quarter gross domestic product growth. 

Ambar Warrick contributed to this article