Gold is trading more than 1% higher in mid-European trading today, Monday, September 22, the opening session of the week, setting a new record high, settling above $3,700 per ounce. Gold is benefiting from the decline in the US dollar, which has been hurt by expectations of a 50 basis point US interest rate cut for the remainder of the year. The yellow metal is trading up approximately 1.12% at $3,724 per ounce, while silver is trading at $43.71 per ounce, up 1.47%, its highest level since August 2011, bringing its gains to more than 50% since the beginning of the year.
Following last week’s first US interest rate cut of the year, market expectations for a 25 basis point US rate cut in both the October and December meetings, according to the CME Fed Watch tool, are 92% and 79%, respectively, supporting gold’s gains. In a related development, reports and data compiled by Bloomberg showed that inflows into gold-backed exchange-traded funds (ETFs) rose to a three-year high of 0.9%, as expectations of a Fed rate cut persist.
The US dollar index is trading down 0.25% at 97.15, following last week’s gains following the rate cut.
Markets are awaiting statements from several Federal Reserve members this week, led by Fed Chairman Jerome Powell’s remarks on Wednesday, as well as the release of consumer spending (PCE) inflation figures, the Fed’s preferred inflation monitor, at the end of the week.
Platinum is trading at $1,419, up 1.05%, while palladium is up 1.51% at $1,166.