Gold Futures Reach Record High on Rate Cut Speculation

Gold prices surged to near-record levels on Monday, driven by expectations of a Federal Reserve rate cut. Spot gold reached $3,489.69 per ounce in morning trading, just shy of the all-time high of $3,500.05 set in April. By 11 a.m. ET, it settled at $3,475.60, marking a 0.8% increase. U.S. gold futures also climbed 0.8% to $3,545.60 per ounce, after hitting a new high of $3,557.10 earlier.

The rise follows a 2.5% gain last week, fueled by U.S. economic data indicating persistent inflation and strong consumer demand, which bolstered the likelihood of a September rate cut. Silver also benefited, reaching $40 per ounce for the first time since 2011.

The U.S. dollar traded near its lowest since late July against a basket of currencies, making precious metals more attractive to international buyers. Ole Hansen, head of commodity strategy at Saxo Bank, noted that gold and silver extended their gains due to ongoing inflation concerns and anticipated rate cuts.

San Francisco Federal Reserve Bank President Mary Daly expressed support for a rate cut, citing labor market risks. Analysts are closely watching the upcoming U.S. job market report, which could influence the Fed's decision. The August non-farm payrolls are expected to show an increase of 78,000 jobs, up from 73,000 in July.