Record gold prices

Gold surged past all-time highs on Monday, amid rising expectations for a U.S. rate cut early next year, despite the Fed’s efforts to temper optimism. The precious metal rose more than 3% in early trading on Monday to surpass its all-time high of $2,148.11, which it reached on Aug. 7, 2020. It has since given back most of those gains and is currently trading at $2,085.81, up 0.72% from Friday. Bullion’s rally since early October accelerated on Friday as Fed Chair Jerome Powell’s comments that monetary policy is “moving into restrictive territory” led to a decline in the dollar and Treasury yields, a positive development for gold. Powell later sought to push back on the rate-cut optimism, warning that it would be “premature to confidently conclude that we have reached a sufficiently restrictive stance or to speculate on when policy might ease.” Even so, swaps markets currently see a potential decline of about 55% in March and are fully pricing in a May cut. Chris Weston, head of research at Pepperstone Group Ltd., said there has been a “big momentum shift” in gold. But U.S. jobs data later this week, along with forecasts of lower real interest rates next year, could pose a downside risk to bullion, Weston said.