Gold breaks new price record as investors move ahead of Fed rate cuts

Gold just broke another record. On Monday, spot gold jumped to $3,726.19 per ounce, the highest it’s ever been, before settling at $3,723.81 as of 0950 GMT. U.S. gold futures for December didn’t lag either, climbing 1.4% to $3,758.40.

The spike came ahead of a packed week where the Federal Reserve is expected to speak, and new inflation data could set the stage for more rate cuts.

Traders are placing bigger bets that the Fed is now well on a dovish path, especially after it just cut interest rates by 25 basis points last Wednesday, its first cut since December.

Investors are now pricing in two more cuts this year, one in October with a 93% chance, and another in December at 81%, according to the CME FedWatch Tool.

Fed speakers and inflation data drive gold outlook

The focus now turns to what Fed officials say this week. Jerome Powell, the Fed Chair, is scheduled to speak on Tuesday, and multiple other officials will speak too. On top of that, core PCE inflation data is dropping Friday. All of this could push the metal even higher if the numbers give the Fed more room to cut again.

Giovanni Staunovo, a strategist at UBS, said, “I would expect gold to reach new record highs this week with Fed officials likely to indicate further rate cuts, but also being data dependent on the pace and magnitude of cuts.” According to Staunovo, the Fed is watching the data, but the tone is clear: they’re leaning toward easing.

But it’s not just interest rates fueling this move. Staunovo also pointed out that Western investors are finally jumping into gold, especially through ETF holdings, which until now had been mostly ignored by them.

“There is a shift in the factors supporting gold. So far it was central banks and Asian demand, now we are also starting to see Western investors looking to add gold, visible in gold ETF holdings, driven by expectations of falling U.S. rates,” he said.

That’s a change from what’s driven the yellow metal this year. So far, it’s been up more than 40%, thanks to geopolitical tension, economic uncertainty, and massive central bank buying. But the new player, rate-cut-hungry Western investors, is what’s pushing it into fresh territory now.

There’s also some technical pressure adding to the mix. Analysts say prices could keep testing resistance around $3,705, and once it clears that, it might climb into a new range, $3,719 to $3,739. Staunovo added that $3,900 by mid-2026 is a real possibility if this momentum holds.

Meanwhile, the rally isn’t just in gold. Silver jumped 1.4% to $43.67, the highest since 2010. Platinum moved up 0.8% to $1,415.09, and palladium added 1.9%, landing at $1,170.63. But all eyes are still locked on the yellow metal, and every sign this week points to more room for it to run.

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