Gold Prices Soar to Record High Amid Sustained Rate Cut Optimism

Gold prices reached an all-time high during Asian trading, supported by ongoing optimism regarding lower U.S. interest rates, and uncertainty leading up to a week filled with economic indicators further bolstered prices.

Last week, gold surged following a 50 basis point rate cut by the Federal Reserve, carrying that momentum into the current week. The softer dollar and Treasury yields also aided the broader metal markets.

Spot gold climbed by 0.3% to a record high of $2,631.19 per ounce, while gold futures increased by 0.4%, reaching $2,655.80 per ounce.

### Gold Supported by Rate Cuts; More Economic Indicators Ahead

Gold’s rise was a result of the Federal Reserve’s decision to lower rates, signaling the start of an easing cycle that analysts anticipate could reduce rates by as much as 125 basis points this year. Lower interest rates are favorable for gold as they lessen the opportunity cost of holding non-yielding assets and diminish the attractiveness of the dollar and debt investments.

This week, more insights from the Fed and data on the U.S. economy are expected. Several Fed officials, including Chair Jerome Powell, are scheduled to speak in the coming days. Additionally, the PCE price index, which is the Fed’s preferred inflation metric, will be released on Friday and could influence the central bank’s future rate cut decisions.

In addition to the Fed’s actions, central bank meetings in Switzerland and Sweden are anticipated to announce interest rate cuts this week, with many global central banks expected to commence easing cycles alongside the Fed.

Aside from gold, prices for other precious metals were less robust. Platinum futures decreased by 0.6% to $974.10 per ounce, and silver futures slipped by 0.2%, reaching $31.43 per ounce.

### Copper Prices Increase Amid Chinese Economic Focus

In the realm of industrial metals, copper prices saw a modest increase, partly due to optimism surrounding lower interest rates that have supported the metal in recent trading sessions. Attention is primarily on potential stimulus measures in China, particularly after the People’s Bank of China unexpectedly cut repo rates to enhance local liquidity.

Benchmark copper futures on the London Metal Exchange rose by 0.3% to $9,525.00 per ton, while one-month copper futures also increased by 0.3%, trading at $4.3420 per pound.

A series of purchasing managers index readings from around the world are set to be released this week, which will provide further insights into business activity, particularly in the manufacturing sector.