Pedro Goncalves writes:
Gold prices surged to a record high on Monday, as investors flocked to the precious metal following last week’s US interest rate cut and the Federal Reserve’s signalling of potential further easing in monetary policy.
At the time of writing, gold futures had gained 1.1%, reaching $3,745.90 per ounce, while the spot price rose 0.6% to $3,709.41 per troy ounce, after briefly hitting a new record of $3,721.08 earlier in the session.
Over the past month, the precious metal has risen by 10%, bolstered by growing expectations that the Fed will implement more interest rate cuts before the end of the year.
“Gold is finding its feet again today, with traders focusing on upside price potential between now and year-end fuelled by projected further rate cuts from the Fed,” said KCM Trade chief market analyst Tim Waterer, adding that sustained central bank buying also continues to support gold's momentum.
Looking ahead, the US core Personal Consumption Expenditures (PCE) price index, the Fed's preferred measure of inflation, is due for release on Friday. Along with speeches from at least a dozen Fed officials, including chairman Jerome Powell on Tuesday, the data could provide further clues as to the central bank’s monetary policy direction.
In addition to US economic factors, geopolitical uncertainty, rising government debts, and persistent central bank buying have helped push gold prices up by 40% over the past year.
Rick Kanda, managing director at The Gold Bullion Company, explained how the strength of the US dollar influences global gold prices. “If the USD strengthens in comparison to the British pound, then UK gold prices will rise, and the US will see gold prices fall, and vice versa if the USD weakens,” he said.
In 2025, the dollar depreciated by 11%, while US gold prices rose by over 25%. UK gold prices followed suit, rising 14% in the first half of the year and 11% more since July. Kanda attributed the rise to expectations of US interest rate cuts but warned that uncertainties around international tariffs and trade could cause fluctuations.
“If these policies don’t see the GBP depreciate, it could be a good opportunity for Brits to invest in gold.”
