Gold surged to a four-month high in Asian trading on Monday, driven by expectations of a Federal Reserve interest rate cut and heightened safe-haven demand amid U.S. tariff uncertainty and political developments affecting the central bank.
Spot gold rose 0.9% to $3,480.56 an ounce, the strongest since mid-April, while December futures climbed 1% to $3,551.82/oz by 01:55 ET (05:55 GMT). Bullion has been on a strong upward trajectory, marking nearly five consecutive days of gains following a 5% jump in August. Silver also rallied sharply, hitting levels not seen in 14 years.
Rate-Cut Speculation and Upcoming Jobs Data
Investor interest in gold was supported after the latest U.S. core PCE price index largely matched forecasts, strengthening bets on a September rate reduction. CME FedWatch data show about a 90% probability of a 25-basis-point cut. Lower borrowing costs increase the attractiveness of non-yielding assets such as gold. Market attention now turns to the August nonfarm payroll report, which could either reinforce or temper expectations for near-term easing.
Trade Tensions and Political Factors Support Bullion
Safe-haven flows were also underpinned by uncertainty around U.S. trade policy. Last week, a U.S. appeals court found many Trump-era tariffs illegal, though they remain in effect until October 14 to allow time for a Supreme Court appeal. Investors also monitored political pressure on the Fed after President Donald Trump attempted to dismiss Federal Reserve Governor Lisa Cook over alleged mortgage fraud in 2021. Cook has rejected the move and filed a lawsuit to contest her removal.
Other Metals Show Strength
Precious metals broadly strengthened Monday, with platinum futures up 1.3% to $1,346.65/oz and silver rising 1.5% to $41.32/oz, its highest since August 2024. Copper prices were mostly steady, with London Metal Exchange futures at $9,934.65 per ton and U.S. futures down 0.2% to $4.60 per pound.
A private survey in China, the world’s largest copper importer, showed factory activity expanded at its fastest rate in five months in August, reflecting easing U.S.-China trade tensions. This contrasted with official PMI data reporting a fifth consecutive month of contraction but hinted at early signs of a rebound in Chinese industrial activity.
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