Gold climbs to reach six-week peak

Gold prices climbed to around $4,240 per ounce on Monday, the highest level in six weeks, driven by rising expectations of a US interest rate cut next week.

A series of dovish remarks from Federal Reserve officials, along with weak economic data following the longest US government shutdown, have boosted speculation that policymakers may lower rates again.

Markets are now pricing in an 87% probability of a 25bps reduction, signaling strong investor conviction that the Fed is preparing to ease further.

Traders are turning their attention to key economic indicators due this week, including US private payrolls data and the Fed’s preferred inflation gauge, the PCE index.

Any signs of cooling inflation or softening labor conditions could reinforce expectations for a rate cut and lend additional support to bullion. At the same time, uncertainty surrounding the pace of the US economic recovery has increased demand for safe-haven assets, giving gold another tailwind.

Gold has posted gains in nearly every month this year, putting it on track for its strongest annual performance since 1979.

The metal’s ascent has been underpinned not only by shifting interest-rate expectations but also by robust central-bank purchases and sustained inflows into gold-backed ETFs, which highlight continued demand from both institutional investors and sovereign buyers.

With geopolitical risks simmering and global growth concerns lingering, the broader environment remains favorable for further strength in gold prices.