Gold pushed to a record $3,728 per oz. on Monday before easing about $10 an oz. as investors piled into exchange-traded funds, extending a rally that resumed after last week’s U.S. Federal Reserve interest-rate cut.
Prices briefly fell after the Fed lowered its benchmark rate by 25 basis points, but momentum returned with the largest one-day inflow into gold exchange-traded funds since January 2022, BMO Capital Markets said in a note on Monday. Global holdings rose by 861,461 oz. on Friday, lifting total exchange-traded fund exposure to 95.8 million oz.
“Gold prices are rising despite both the US dollar index and U.S. 10-year Treasury Inflation-Protected Securities yield moving higher again since Wednesday’s rate decision,” BMO Capital Markets commodities analysts Helen Amos and George Heppel said. “Usually these are negatively correlated with gold prices.”
The rally reflects expectations of easier U.S. monetary policy and renewed buying by funds and central banks, as investors hedge against weak labour data, volatile bond markets and geopolitical tensions. The price of gold has gained about 41% this year.
Futures
Futures positioning also improved, with Commodity Futures Trading Commission data showing non-commercial holdings up 4,700 lots to 266,000 lots last week, though still shy of the 300,000-lot peak of 2024, BMO said. U.S. gold futures for December delivery were at $3,752.60 Monday morning.
Markets are attuned to a busy slate of Federal Reserve appearances this week, with Chair Jerome Powell scheduled to speak on Tuesday, as investors look for more direction on the policy outlook. They are also awaiting Friday’s release of the U.S. core personal consumption expenditures price index.
In other precious metals, spot silver gained 0.8% to $43.44 per oz., its strongest level in more than 14 years. Platinum slipped 0.4% to $1,398.94 per oz., while palladium advanced 3% to $1,183.93 per ounce.
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