Gold hits record peak as rate cut bets burnish appeal, silver jumps

Gold hits record peak as rate cut bets burnish appeal, silver jumps

By Sherin Elizabeth Varghese

(Reuters) – Gold prices hit an all-time high on Monday as slowing U.S. inflation reinforced expectations that the Federal Reserve could soon make its first interest rate cut, while silver hit its highest level in over 11 years.

Spot gold was up 0.9% at $2,436.76 an ounce, at 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 the weak U.S. dollar and sentiment is bolstered by the fact that the Federal Reserve is expected to cut rates soon, said Kyle Rodda, financial markets analyst at Capital.com.

The dollar index remained subdued, making greenback-priced bullion more attractive to buyers holding other currencies. (USD/)

Data from last week showed signs of slowing inflation and traders now expect a 65% chance of seeing US rates fall by September.

Bullion is known as a hedge against inflation, but higher rates increase the opportunity cost of holding non-yielding gold.

Minutes from the Fed’s latest policy meeting scheduled for Wednesday as well as comments from a slew of Fed speakers will be on investors’ radar this week.

“Gold prices hit a record high before the Chinese market opened on Monday. However, as this move was not confirmed by a weaker US dollar, it appears to have been supported by rising gold contracts. metals futures on Chinese exchanges,” said City Index senior analyst Matt Simpson. (MET/L)

China, the largest consumer of ingots and a majority of industrial metals, announced “historic” measures on Friday to stabilize its real estate sector affected by the crisis.

According to Reuters technical analyst Wang Tao, spot gold could test resistance at $2,447 an ounce, a break above could trigger a gain to $2,455.

Spot silver rose 2.5% to $32.28 after hitting a more than 11-year high.

Platinum rose 0.7% to $1,088.75, after hitting its highest level since May 12, 2023. Palladium fell 0.5% to $1,013.56.

(Reporting by Sherin Elizabeth Varghese in Bangalore; Editing by Sohini Goswami)

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