By Sherin Elizabeth Varghese
(Reuters) – Gold prices hit a record high on Monday as a slowing U.S. inflation trend boosted expectations that the Federal Reserve could soon make its first interest rate cut, while silver hit a more than 11-year peak.
Spot gold rose 0.9% to $2,436.76 an ounce as of 0340 GMT, after hitting a record high of $2,440.49 earlier in the session.
U.S. gold futures rose 1% to $2,440.60.
The main driver for gold is a soft U.S. dollar and sentiment is being boosted based on the fact that the Federal Reserve is expected to cut interest rates soon, said Kyle Rodda, a financial market analyst at Capital.com.
The dollar index remained subdued, making dollar-priced bullion more attractive to buyers holding other currencies. [USD/]
Data last week showed signs of cooling inflation and traders now expect a 65% chance of a US rate cut by September.
Bullion is known as an inflation hedge, but higher interest rates increase the opportunity cost of holding unprofitable gold.
The minutes of the Fed’s latest policy meeting, which takes place on Wednesday, along with comments from a slew of Fed speakers, will be on investors’ radar this week.
“The gold price rose to a brutal record high on Monday, ahead of the opening of the Chinese market. But since the move has not been confirmed by a weaker US dollar, it appears that it has received a tailwind from higher metal futures on Chinese exchanges. says City Index senior analyst Matt Simpson. [MET/L]
China, the largest consumer of precious metals and a majority of industrial metals, announced “historic” steps on Friday to stabilize its crisis-hit real estate sector.
Spot gold could test resistance at $2,447 an ounce, while a break above could trigger gains to $2,455, according to Reuters technical analyst Wang Tao.
Spot silver rose 2.5% to $32.28 after hitting an 11-year high.
Platinum rose 0.7% to $1,088.75, after hitting its highest since May 12, 2023. Palladium fell 0.5% to $1,013.56.
(Reporting by Sherin Elizabeth Varghese in Bengaluru; Editing by Sohini Goswami)
