Gold Prices Reach Record High

Gold prices hit a record high in Asian trade, bolstered by continued optimism regarding lower U.S. interest rates and upcoming economic signals.

The metal surged to record highs last week after the Federal Reserve reduced interest rates, maintaining this momentum. A weaker dollar and lower Treasury yields also supported broader metal markets.

Current Prices

• Spot Gold: Rose 0.3% to a record high of $2,631.19 per ounce.
• Gold Futures: Rose 0.4% to $2,655.80 per ounce.

Impact of Federal Reserve Rates

Gold’s rise is attributed to the Fed’s recent decision to cut rates by 50 basis points, kicking off an easing cycle likely to reduce rates by up to 125 bps this year.

Lower interest rates make gold more appealing by decreasing the opportunity cost of investing in non-yielding assets and lowering the attractiveness of the dollar and debt.

This week, more signals from the Fed and U.S. economy are expected. Numerous Fed officials, including Chair Jerome Powell, will speak soon. Additionally, the PCE price index, the Fed’s preferred inflation measure, will be released on Friday and could impact future rate cuts.

Central banks in Switzerland and Sweden are also anticipated to announce interest rate cuts this week, as most global central banks synchronize their easing measures with the Fed.

Other precious metals, however, lagged behind with prices declining:
– Platinum Futures: Fell 0.6% to $974.10 per ounce.
– Silver Futures: Fell 0.2% to $31.430 per ounce.

Copper Prices Rise Amid Chinese Stimulus

In industrial metals, copper prices increased slightly, benefiting from the optimism surrounding lower rates.

Attention is primarily on stimulus efforts in China, where the People’s Bank of China unexpectedly cut repo rates to enhance local liquidity.

Copper futures on the London Metal Exchange rose 0.3% to $9,525.0 per ton, with one-month copper futures also increasing by 0.3% to $4.3420 per pound.

A series of global purchasing managers index readings are expected this week, which will provide further insights into manufacturing and business activities.