Spot Gold held in proximity to record highs on Monday, while the US Dollar plummeted to a fresh 13-month low, after Federal Reserve Chair Jerome Powell cemented market expectations of a rate cut in September.
In a speech at the Jackson Hole symposium last week, the Fed Chair signaled the central bank was ready to adjust monetary policy, as the timing and size of rate cuts would depend on future economic data.
Powell pointed out that labor market risks had increased, while inflation risks had diminished. Fed policy makers now have greater confidence that inflation is moving towards the 2% target, which supports the case for monetary policy easing.
Market expectations are split between a 25 basis point and a 50 basis point rate cut next month. Also, markets continued to price in 100 basis points of Fed rate cuts by the end of this year.
More support for the yellow metal came from increased gold import quotas by China and increasing holdings in gold-backed ETFs, which indicated strong demand.
As of 7:05 GMT on Monday Spot Gold was edging up 0.14% to trade at $2,516.24 per troy ounce.
Last week, the precious metal registered a fresh all-time high of $2,531.76 per troy ounce.
Gold Futures for delivery in December were up 0.30% on the day to trade at $2,554.00 per troy ounce.
The US Dollar Index, which reflects the relative strength of the greenback against a basket of six other major currencies, was little changed at 100.707 on Monday.
Earlier in the session, the DXY went down as low as 100.534, or a level not seen since July 20th 2023.
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