Gold prices surged to a six-week high on Monday driven by a weaker dollar and increasing risk aversion among investors. Silver also marked a record high, reflecting the overall optimism in the precious metals market. Spot gold climbed 0.2% to reach $4,240.54 per ounce, hitting its highest point since October 21, while U.S. gold futures for December delivery rose by 0.5% to $4,276.00.
Silver witnessed an impressive 2% jump, reaching $57.48 per ounce and even touching an all-time high of $57.86. The decline in the U.S. dollar to a two-week low made gold more affordable for investors holding other currencies, further boosting its appeal. An OANDA senior market analyst, Kelvin Wong, explained that the current sell-off in major cryptocurrencies and S&P futures led to a risk-off session, propelling investors towards gold as a safe-haven asset.
The ongoing uncertainty led to a decrease in U.S. stock futures in Asian trade, with popular cryptocurrencies like bitcoin and ether also witnessing declines. Federal Reserve officials' dovish comments, combined with weaker U.S. economic indicators, have solidified market expectations of a December rate cut. The CME's FedWatch tool suggests an 87% possibility of a rate reduction, emphasizing the likelihood of a shift in the Federal Reserve's policy.
Looking ahead, market participants are eagerly waiting for core U.S. Personal Consumption Expenditures figures on Friday to navigate the Federal Reserve's upcoming actions. The anticipation of lower borrowing costs has provided support to non-yielding bullion, contributing to the upward momentum of silver prices. Notably, silver's recent surge can be attributed to thin liquidity following the CME outage last week rather than any significant underlying fundamentals.
In the realm of precious metals, platinum saw a rise of 1.3% to $1,694.70, while palladium gained 2.1% to $1,482.45. This uptrend underscores the broader positive sentiment prevailing in the market towards precious metals as investors seek safe-haven assets amidst economic uncertainties. As markets closely monitor both domestic and international developments, the trajectory of precious metals is likely to remain in focus given the prevailing economic landscape.
