Gold prices surged to new all-time highs on Monday, as a weaker dollar and expectations of US Federal Reserve rate cuts boosted investor sentiment. Spot gold rose 0.8 percent to $3,789.39 an ounce, after touching a record $3,798.32 earlier. US gold futures for December delivery gained 0.3 percent to $3,818.30. Analysts attribute the rally to softer dollar trends and signs of cooling inflation, which strengthen the case for lower interest rates.
Recent data from the US Commerce Department showed the Personal Consumption Expenditures (PCE) Price Index rose 0.3 percent in August, in line with forecasts. This steady reading reinforced expectations that the Fed will implement rate cuts in October and possibly December. “That benign inflation print has given markets reason to believe further Fed cuts are coming,” said Kyle Rodda, analyst at Capital.com. Investors now see a 90 percent chance of a Fed rate cut in October and 65 percent odds of another in December. These developments underscore how Fed rate cut hopes lift demand for gold as a safe-haven asset.
Asian stock markets opened cautiously amid fears of a US government shutdown, which further strengthened bullion’s appeal. SPDR Gold Trust holdings, the world’s largest gold-backed ETF, increased nearly 0.9 percent to 1,005.72 tonnes on Friday, reflecting strong investor interest. Other precious metals also benefited, with spot silver rising 1 percent to $46.47 per ounce, platinum jumping 2.6 percent to $1,608.90, and palladium up 1.4 percent to $1,287.19.
In Pakistan, domestic gold prices mirrored the global rally. The price of 24-karat gold per tola rose by Rs1,900 to Rs397,700, while 10-gramme gold increased by Rs1,629 to close at Rs340,963. Jewellers and market analysts expect the bullish trend to continue, with strong global momentum and Fed rate cut hopes lift demand fueling further gains.
The combination of monetary easing expectations, safe-haven demand, and geopolitical uncertainty continues to position gold as a key investment asset in both international and domestic markets.
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