MARKET NEWS
Gold price holds near record ahead of Fed interest rate decision -
Gold (GC=F)
Gold prices remained largely unchanged on Monday morning, hovering just below record highs, as investors awaited the anticipated rate cut from the US Federal Reserve this week. While the prospect of lower rates continued to support gold, profit-taking and a stronger dollar capped any further gains.
At the time of writing, gold futures (GC=F) retreated 0.4% to $3,672.20 per ounce, while the spot price of gold was muted at $3,641.55 a troy ounce, after hitting a record high of $3,673.95 last week.
The temptation by traders to lock in profit and some resilience from the dollar was putting pressure on gold (GC=F), KCM Trade chief market analyst Tim Waterer said.
"The bullish outlook remains in place; however, a period of consolidation or a minor pullback would arguably be a healthy outcome that supports gold's ambitions for hitting loftier price targets down the road," Waterer said.
The US dollar index (DX-Y.NYB), which measures the greenback against a basket of six currencies, was up by 0.1% to 97.56, making dollar-priced gold (GC=F) more expensive for international buyers. The strength of the dollar acted as a counterweight to gold's gains.
US inflation data for August came in slightly above expectations on Thursday, but investors anticipate this will not deter the Fed from cutting rates by a quarter-percentage-point on Wednesday.
"The risk for gold (GC=F) this week is that the Fed may not be so clear-cut in signalling when further rate cuts could arrive," Waterer said.
Gold (GC=F), a non-yielding asset, is often viewed as a safe haven during periods of market volatility, and its appeal tends to increase in low-interest-rate environments.
The Fed’s meeting this week comes amid a backdrop of challenges, including a legal dispute over its leadership and political pressure from US president Donald Trump, who has sought to exert greater influence over the central bank’s monetary policy.
Goldman Sachs (GS), in a note released on Friday, expressed an optimistic long-term view on gold (GC=F) but warned of potential short-term risks.
For gold (GC=F), "while we see the risks to our $4,000/toz mid-2026 forecast as skewed to the upside, rising speculative length raises the risk of tactical pullbacks, as positioning tends to mean-revert," the investment bank said.
