Record Gold Rally Driven by Expectations of Lower US Interest Rates

Highlights:

• For the first time, gold advanced beyond US$3,800 per ounce on Monday.
• Spot gold climbed 1.1% to US$3,806.58 per ounce at 2:52 pm AEST, at the time of writing.
• Evolution Mining, Newmont, and Northern Star Resources saw gains between 3%–4.3%.

Gold surged past US$3,800 per ounce for the first time on Monday, buoyed by expectations that the US Federal Reserve may soon deliver further interest rate cuts. The rally also lifted Australian gold miners, with Evolution Mining Limited (ASX: EVN) climbing 4.3%, Newmont Corporation (ASX: NEM) up 3.4%, and Northern Star Resources Limited (ASX: NST) advancing 3% as investors flocked to the sector. Australia, one of the world’s largest gold producers, stands to benefit from the metal’s renewed strength, reinforcing its role as a key player in the global gold market.

Spot Gold Rally and Currency Shift

Spot gold gained 1.1% to reach US$3,806.58 per ounce at 2:52 pm AEST, at the time of writing, marking a historic milestone for the precious metal. Gold’s climb was driven by a softer US dollar, making the metal more affordable for those trading in other currencies.

A softer US dollar often supports gold prices since the metal is priced in the greenback, making it relatively cheaper for international investors. Meanwhile, the Australian dollar strengthened by 0.4% to US65.71¢, further influencing trading dynamics in the local market.

Market Outlook

Analysts say the gold rally is driven by expectations of lower US interest rates, as reduced rates generally boost demand for assets like gold that don’t offer interest returns. If the Federal Reserve signals additional rate cuts, gold prices could find even stronger support in the coming months.

For Australian miners such as Evolution Mining, Newmont, and Northern Star Resources, the higher gold prices may translate into improved margins and stronger investor sentiment.

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