Gold Near Record High as Markets Await Fed Speeches and Inflation Data

Highlights:

• Spot gold traded close to record highs at the time of writing, following last week’s Fed rate cut.
• Market participants await key inflation data and comments from several Fed policymakers, with Jerome Powell among the scheduled speakers.
• Silver nears a 14-year peak while platinum and palladium see mixed moves.

Gold Prices Stay Elevated

Gold prices hovered near record highs on Monday as traders turned their attention to upcoming US Federal Reserve speeches and key inflation data due later this week. Spot gold edged up 0.1% to US$3,688.76 per ounce at 2:17am GMT (11:17am AEST) at the time of writing, not far from last Wednesday’s record of US$3,707.40. Futures tied to December gold contracts gained 0.5%, reaching US$3,723.70.

Market Focus on Inflation and Fed Outlook

Investors are watching closely for Friday’s release of the US core personal consumption expenditure (PCE) price index, the Fed’s preferred inflation measure. In addition, at least a dozen Federal Reserve officials are scheduled to deliver speeches this week, including chairman Jerome Powell on Tuesday. Markets are hoping for further clarity on the central bank’s path for monetary policy after last week’s quarter-point rate cut.

The Fed signalled potential for additional easing but flagged ongoing inflation concerns, leaving uncertainty about how aggressive future cuts will be. Newly appointed Fed governor Stephen Miran defended his call for deeper cuts, highlighting divisions within the central bank.

Investor Outlook and Precious Metals Trends

Markets are anticipating two additional rate cuts before year-end — one projected for October and another in December — with current odds of 93% and 81% respectively. A lower interest rate environment typically benefits gold and other precious metals, as it reduces the relative cost of holding assets that do not generate interest.

Gold has surged more than 40% so far this year, boosted by global economic uncertainty, central bank purchases, and looser monetary policy. Meanwhile, spot silver rose 0.3% to US$43.20 per ounce, close to a 14-year high. Platinum slipped 0.4% to US$1,398.40, while palladium edged 0.1% higher to US$1,150.75.

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