Gold prices rose to their highest level in more than four months during Asian trading on Monday, supported by hopes of a Federal Reserve rate cut this month, amid growing concerns over trade policy uncertainty and the central bank’s independence, which boosted demand for the precious metal as a safe haven.
Spot gold climbed 0.9% to $3,480.56 per ounce, its highest since mid-April, while December gold futures rose 1% to $3,551.82 per ounce.
Gold is on track to secure strong gains for the fifth consecutive session, after jumping nearly 5% in August, buoyed by rising bets on a September rate cut, especially after U.S. personal consumption expenditure (PCE) data came largely in line with expectations.
According to the CME FedWatch tool, markets are pricing in close to a 90% chance of a 25-basis-point cut this month. Lower rates reduce the opportunity cost of holding non-yielding assets such as gold, thereby increasing its appeal.
At the same time, investors are shifting their focus to this week’s U.S. employment data. A weak nonfarm payrolls reading could strengthen the case for a near-term rate cut, while stronger numbers may prompt investors to scale back those expectations.
Safe-haven flows into gold were also reinforced by ongoing uncertainty around trade policy, after a U.S. appeals court ruled last week that several tariffs imposed during the Trump administration were illegal. However, the court left the tariffs in place until October 14 to allow the government time to appeal to the Supreme Court.
In parallel, investors are closely watching signs of political pressure on the Federal Reserve, after former President Trump attempted last week to remove Fed Governor Lisa Cook, citing an alleged real estate fraud case dating back to 2021. Cook rejected the move and filed a lawsuit challenging the attempt.
In other metals markets, silver prices jumped to a 14-year high, with futures up 1.5% to $41.32 per ounce. Platinum futures gained 1.3% to $1,346.65 per ounce.
By contrast, copper prices were little changed on the London Metal Exchange at $9,934.65 per ton, while U.S. copper futures slipped 0.2% to $4.60 per pound.
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