FX.co ★ Gold Hits 5-Week High

Gold prices increased to approximately $4,240 per ounce on Monday, marking their highest level in five weeks. This rise is attributed to growing expectations of a potential reduction in U.S. interest rates later this month. Recent comments from Federal Reserve officials suggest a more dovish stance, and coupled with weak economic data following the prolonged U.S. government shutdown, have amplified speculations that the Fed might opt for another rate cut. Current market sentiment places an 87% likelihood on a 25 basis point reduction. Investors are now keenly observing upcoming U.S. manufacturing and private payroll reports expected this week for additional indications on the possibility of a rate cut prior to the Fed's policy meeting. Gold has observed gains nearly every month this year, setting the stage for its most robust annual performance since 1979. The upward movement in gold prices has been bolstered by significant central bank acquisitions and strong ETF inflows, which last month propelled prices to a record high exceeding $4,380 per ounce.