Gold prices surged in today’s trading to new record highs as investors flocked to safe-haven assets amid growing caution over the trajectory of U.S. interest rates. Spot gold climbed to $3,759.18 per ounce, while futures touched a peak of $3,794.82. This rally was driven by a mix of factors, most notably statements from Federal Reserve officials signaling caution about the pace of rate cuts.
Raphael Bostic, President of the Atlanta Fed, stated he would not favor any additional cuts in October due to ongoing inflationary pressures. Similarly, Beth Hammack from the Cleveland branch echoed these concerns, noting that current policy is not restrictive enough. In contrast, new Board member Steven Miran adopted a more dovish stance, calling for a 50 basis point cut instead of the 25 points approved last week a position largely aligned with President Donald Trump’s push for aggressive rate reductions.
Fed Chair Jerome Powell emphasized that last week’s cut was a response to signs of labor market weakness but stressed that inflation remains a real risk, particularly amid the new tariffs. Powell is scheduled to speak today at 12:35 p.m. New York time, an address markets are watching closely.
Beyond the rate outlook, Trump’s announcement of higher fees for a widely used work visa has raised concerns about the business environment, while his controversial remarks on vaccines, autism, and certain medications pressured pharmaceutical stocks. These developments have strengthened the case for hedging with gold. A pullback in Asian equities especially the Chinese market after last month’s sharp rally also boosted investor flows into gold.
Although precious metals have benefited from the recent rate cut, their gains remain modest compared to gold. Platinum rose 0.3% to $1,421 per ounce, while silver added 0.2% to $44.31. In industrial metals, copper slipped 0.3% on the London Metal Exchange to $9,975 per ton and fell 0.5% on the U.S. Comex to $4.6275 per pound.
Markets are also awaiting today’s release of the September Purchasing Managers’ Index, expected to show a slowdown in manufacturing and services activity potentially amplifying fears of a U.S. growth deceleration. The key event, however, will come Friday with the release of the Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation gauge. Forecasts suggest core inflation will remain above the 2% target, presenting the central bank with a difficult balancing act between supporting the labor market and controlling prices.
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