Gold climbed to its highest level in more than four months on Monday, September 1, as growing expectations that the U.S. Federal Reserve (Fed) will cut interest rates this month boosted the appeal of the precious metal.
At the close of trading:
Spot gold rose 0.7% to $3,470.69 per ounce, the highest since April 23.
Gold futures added 0.8% to $3,543.70 per ounce.
On August 29, San Francisco Fed President Mary Daly reiterated her support for a rate cut, citing potential risks to the labor market.
Analysts noted that her optimistic remarks helped investors overlook higher-than-expected core PCE data released the same day, keeping expectations for a 0.25% rate cut in place this month.
According to the CME FedWatch Tool, the probability of a 25-basis-point rate cut in September currently stands at 87%.
Gold received additional support after a U.S. appeals court ruled that most of former President Donald Trump’s tariff policies were unlawful, putting pressure on the U.S. dollar and driving gold prices to their highest level in four months.
Meanwhile, economic data showed that the Personal Consumption Expenditures (PCE) price index rose 0.2% from the previous month and 2.6% year-over-year, both in line with forecasts.
The market is now focused on the upcoming U.S. nonfarm payrolls report, scheduled for release on September 5, which could play a crucial role in determining the scale of the Fed’s rate cut later this month.
On the trade front, U.S. Trade Representative Jamieson Greer stated on August 31 that the Trump administration continues trade negotiations with global partners, despite the recent appeals court ruling.
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