Gold Jumps to Highest Level in 4 Months and Silver Surpasses $40
Gold prices jumped to their highest levels in more than four months on Monday, September 1, supported by rising bets on a near-term cut in U.S. Federal Reserve interest rates, enhancing the appeal of the precious metal. In the same context, silver rose to surpass the $40 per ounce mark for the first time in over a decade.
Spot gold recorded a rise of 0.8% to reach $3477.39 per ounce, marking its highest level since April 23, while U.S. gold futures for December delivery also jumped 0.8% to $3545.50. Spot silver rose by 1.6% to reach $40.31 per ounce, the highest level since September 2011.
Experts believe this jump was supported by several factors, as Matt Simpson, senior analyst at City Index, stated: "The dovish comments from San Francisco Fed President Mary Daly helped traders overlook the high core inflation data on Friday, keeping the door open for a 25 basis point rate cut this month."
Simpson added that "the U.S. Appeals Court's decision deeming most of President Donald Trump's tariffs illegal also contributed to pressure on the U.S. dollar and pushed gold to its highest level in four months."
U.S. inflation data came in line with expectations, showing the Personal Consumption Expenditures Price Index rising 0.2% month-on-month and 2.6% year-on-year. Mary Daly's comments on social media on Friday also bolstered rate cut expectations, as she confirmed her support for it in light of the risks threatening the labor market.
Traders are currently pricing in an 87% chance of the Fed cutting rates by 25 basis points later this month, according to the CME FedWatch tool, as gold, which does not yield returns, benefits from a low interest rate environment.
Attention is now focused on the U.S. non-farm payroll data set to be released on Friday, which may determine the extent of the expected rate cut this month. On the trade front, U.S. Trade Representative Jamison Greer stated on Sunday that the Trump administration continues its talks with trading partners despite the Appeals Court decision.
In a related context, other precious metals also performed positively, with platinum rising 0.9% to $1376.95, and palladium increasing 0.8% to $1118.12.
