Gold Jumps to All-Time High on Expectations of US Rate Cuts

Gold prices surged to a record high on Monday as investors grew increasingly confident that the US Federal Reserve will continue cutting interest rates into next year, driven by signs of a weakening labour market and easing inflation. The precious metal climbed to an all-time high of $4,383.76 per ounce in early trading, surpassing its previous peak of $4,381.52 recorded in October. The rally followed a string of US economic data released last week that strengthened expectations of further monetary easing by the Federal Reserve. Spot silver also surged, rising 2.7 percent to a historic high of $69.23 per ounce. Gold has gained an impressive 67 percent so far this year, breaking multiple records and crossing the $3,000 and $4,000 per-ounce milestones for the first time. The metal is on track for its strongest annual performance since 1979. Silver has vastly outperformed gold, soaring 138 percent year-to-date, supported by strong investment demand and persistent supply constraints. “With December typically delivering positive returns for gold and silver, seasonality is working in their favour,” said Matt Simpson, senior analyst at StoneX. “However, with gold already up about 4 percent this month and year-end approaching, lower trading volumes could increase the risk of profit-taking.” Gold’s rally has also been underpinned by its traditional role as a safe-haven asset amid heightened geopolitical and trade tensions, steady purchases by central banks, and expectations of lower interest rates in the coming year. A softer US dollar has further supported prices by making gold more affordable for overseas buyers. Markets are currently pricing in two US interest rate cuts next year, despite the Federal Reserve maintaining a cautious stance. Non-yielding assets such as gold typically benefit from a lower interest rate environment. Simpson added that expectations of additional rate cuts in 2026, combined with a faster slowdown in US employment and a more dovish Fed, could provide further upside for gold prices. Elsewhere in the precious metals market, platinum jumped 4.1 percent to $2,054.25 per ounce, its highest level in more than 17 years, while palladium climbed 4 percent to $1,781.32, nearing a three-year high.