Gold prices rallied in Asian trading on Monday, pushing towards the $2,400 mark as investors bet on potential interest rate cuts by the Federal Reserve. The precious metal has been gaining traction after encouraging inflation data last week, particularly the PCE price index, the Fed’s preferred inflation gauge. This has fueled speculation that the central bank might soon begin lowering borrowing costs, a move that is typically favorable for gold.
Further supporting gold prices is the weakening US dollar, which has been declining after the release of the inflation data. A weaker dollar makes gold cheaper for buyers using other currencies. While high interest rates have dampened gold’s appeal in recent years, its status as a safe haven asset continues to attract investors during periods of economic uncertainty.
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Other precious metals, such as platinum and silver, also saw gains on Monday, recovering from recent losses. Copper prices also rose modestly, likely driven by hopes for economic recovery in China, although concerns about weak economic signals and a lack of clarity on stimulus measures persist.
The upcoming week holds key economic data releases, particularly China’s Purchasing Managers Index (PMI), which will provide insights into the health of China’s manufacturing and services sectors, crucial for copper demand.
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Overall, the gold market appears to be bullish, fueled by rate cut expectations and a weakening dollar. The upcoming Fed meeting will be closely watched for any signals on future rate policy, which could further impact gold prices.