Gold Prices Hit New Record High, Analyst Says Further Hint Of Rate Cuts Could Add To Yellow Metal’s Shine: Report

Gold prices surged on Monday to reach a new all-time high, with spot gold climbing to $3,728 per troy ounce, after surging by over 1%. 

An analyst reportedly expects the yellow metal to shine even brighter, given that the Federal Reserve is likely to announce further rate cuts this year. "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," said UBS analyst Giovanni Staunovo, according to a Reuters report.

Gold futures maturing in December surged 1.38% to hover around $3,757 at the time of writing.

From Fed Chair Jerome Powell to the newest appointee to the central bank’s board of governors, Stephen Miran, several Fed officials are scheduled to speak this week. Investors will closely monitor their speeches to glean clues about the central bank’s future monetary policy direction.

Last week, the central bank announced a 25-basis-point rate cut, its first reduction in 2025. The Federal Open Market Committee (FOMC) highlighted the moderation in economic activity. It also touched upon the weakness in the labor market, stating that “job gains have slowed” while noting that inflation remains “elevated.”

In a recent note, analysts at ING Think explained the surge in gold prices, noting that “lower borrowing costs usually benefit precious metals, which do not pay interest.”

Meanwhile, U.S. equities declined in Monday’s pre-market trade. At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was down 0.26%, while the Invesco QQQ Trust (QQQ) fell 0.22%. Retail sentiment around the S&P 500 ETF on Stocktwits was in the ‘bullish’ territory.

The SPDR Gold Shares ETF (GLD) was up 1% at the time of writing, while the iShares Gold Trust ETF (IAU) was up 0.99%. The GLD and IAU ETFs have both surged nearly 40% year-to-date.

Also See: Nasdaq Futures Edge Lower On Monday Morning: FOXA, ORCL, TSLA, COIN Among Stocks To Watch

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