Gold Surges on Rate Cut Hopes

16 Sep 2024 , 10:06 AM

Gold prices edged up on Monday, buoyed by a weaker dollar and the expectation of a more aggressive rate cut by the US Federal Reserve at its upcoming meeting.

Spot gold was up 0.2% to $2,580.81 per ounce. Bullion reached a new high of $2,585.99 on Friday.

US gold futures nudged down 0.1% to $2,608.60.

The dollar fell 0.1%, making gold cheaper for other currency holders.

All eyes will be on the Federal Reserve this week as speculation grows about the magnitude of interest rate cuts and the timing of further reductions at its monetary policy meeting.

Markets are now pricing in a 52% possibility of a 50-bp easing at the end of a two-day meeting on Wednesday, up from 43% on Friday, and a 48% chance of a 25-bps drop, according to the CME FedWatch tool.

Lower rates lower the potential cost of owning zero-yield bullion.

Data released on Friday revealed that U.S. consumer confidence increased to 69.0 in September from 67.9 in August, showing higher sentiment despite lower inflation, albeit caution lingers ahead of the November election.

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