Spot Gold extended its bullish run to a new all-time high of $3,818.41/oz. on Monday, underpinned by a weaker US Dollar and rising expectations the Federal Reserve will continue easing its monetary policy this year.
Annual core PCE inflation has remained steady at 2.9% in August, while annual PCE inflation has accelerated to 2.7% from 2.6% in July.
“That benign inflation print in the United States has given the markets reason to believe further Fed cuts are coming in October and December,” Capital.com analyst Kyle Rodda was quoted as saying by Reuters.
“Sentiment is very bullish and we are on track to retest another record high this week. The gold market is positioned quite long at the moment and that may be pointed to as being a reason to be cautious about future upside.”
Markets are now pricing in about an 89% chance of a 25 basis point Fed rate cut in October and a 66% chance of another 25 bps cut in December.
Also boosting Gold, the US Dollar Index was last down 0.31% to 97.877.
A weaker dollar makes dollar-priced Gold more appealing to international investors holding other currencies.
Spot Gold was last up 1.48% on the day to trade at $3,815.44 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 45.39%.
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