GOLD prices inch higher on Monday (Sep 16), supported by a weaker US dollar and on the prospect of a more aggressive rate reduction by the US Federal Reserve at its upcoming policy meeting.
Spot gold was up 0.2 per cent at US$2,580.81 per ounce, as at 0020 GMT. Bullion rose to a record high of US$2,585.99 on Friday.
US gold futures edged 0.1 per cent lower to US$2,608.60.
The US dollar weakened 0.1 per cent, making gold less expensive for other currency holders.
All eyes will be on the Federal Reserve this week as speculation mounts over the extent of interest rate cuts and the pace of future reductions at its monetary policy meeting.
Markets are currently pricing in a 52 per cent probability of a 50-bp easing at the conclusion of a two-day meeting on Wednesday, up from 43 per cent on Friday, while there are a 48 per cent chance of a 25-bps cut, according to the CME FedWatch tool showed.
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Lower rates reduce the opportunity cost of holding a zero-yield bullion.
Data on Friday showed that US consumer sentiment rose to 69.0 in September from 67.9 in August, reflecting improved sentiment amid easing inflation, though caution remains ahead of the November election.
Gold market bulls are locking in bullion prices surging to records high, with a milestone of US$3,000 per ounce coming into focus, fired up by monetary easing by major central banks and a tight US presidential election race.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.03 per cent to 870.51 tonnes on Friday.
Spot silver gained 0.8 per cent to US$30.89 per ounce, platinum fell 0.2 per cent to US$993.40 and palladium shed 0.3 per cent to US$1,065.78. REUTERS
