Spot Gold scaled a fresh all-time high of $3,722.41/oz. on Monday on expectations the Federal Reserve will continue easing its monetary policy even as the US economy remains resilient.
The Fed lowered its federal funds rate target range by 25 basis points to 4.00%-4.25% at its September meeting and indicated another 50 basis points of rate cuts by the end of the year.
Fed Chair Jerome Powell described the September policy action as a risk-management cut addressing the weakening labor market.
Powell also noted the US central bank was in a “meeting-by-meeting situation” in regard to the rate outlook.
Markets are now pricing in about a 92% chance of another 25 basis point Fed rate cut in October.
Lower interest rates tend to reduce the opportunity cost of holding Gold, which pays no interest.
Spot Gold was last up 1.00% on the day to trade at $3,721.65 per troy ounce.
Strong central bank buying, US tariff policies, potential rate cuts by the Federal Reserve and geopolitical uncertainty have fueled Gold’s rally to a series of record highs this year. Year-to-date, the yellow metal has surged 41.82%.
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