Business Reporter
Gold hit a fresh record amid growing optimism about the outlook for US monetary policy, as investors looked ahead to a key inflation print that may give policymakers room to lower rates. Silver extended gains to reach the highest in more than nine years.
Bullion rose as much as 0.9 percent to $3 719.95 an ounce yesterday, eclipsing an all-time high set last week after the Federal Reserve on Wednesday reduced rates for the first time since December. Lower rates benefit non-interest bearing precious metals.
Silver rallied even harder with support from bullish options traders, reaching as high as $43.7727 an ounce yesterday. The trading volume of IShares Silver Trust options on Friday surged to 1.2 million — the highest daily turnover of contracts since April 2024 — while call options volumes also spiked.
The fervour also spilt over into platinum and palladium, signalling growing investor appetite for precious metals used in key industries.
“Technicals are looking pretty strong, and expectations are rising for deeper rate cuts,” said Soni Kumari, commodity strategist at ANZ Group Holdings. In silver, “the recent resistance at $43 an ounce was broken, while gold powered through $3,708 an ounce — suggesting prices will continue to push higher.”
Traders will parse incoming data this week, including activity readings in Europe and Friday’s personal consumption expenditures price index in the US. The Fed’s preferred measure of underlying inflation likely grew at a slower pace last month, which would boost the argument for rate cuts. Additionally, Powell is also due to speak on the economic outlook on Tuesday.
Markets are pricing in almost two more rate cuts this year, with the outlook for further Fed monetary easing providing a major catalyst in bullion’s surge of more than 40 percent this year.
Prices have also been supported by haven demand due to concerns over geopolitical conflicts and the impact of US President Donald Trump’s tariffs on the global economy, along with increased central-bank purchases and holdings in exchange-traded funds.
Spot gold was 0.8 percent higher to $3 715.75 an ounce as of 2:56 p.m. in Singapore. The Bloomberg Dollar Spot Index was flat. Silver rose 1.6 percent, platinum was up 1 percent and palladium gained 0.9 percent.
— Bloomberg
