Gold prices reached a record high in Asian trade on Monday as speculation grows that the Federal Reserve will implement a larger interest rate cut later this week.
Reports of a second assassination attempt on Donald Trump, the Republican presidential nominee, also drove demand for safe havens. Despite the incident, Trump emerged unscathed and the assailant was detained.
Trading volumes in Asia were somewhat restricted due to market holidays in Japan, China, and South Korea. Gold rose 0.4% to a record high of $2,589.02 per ounce, while futures for December increased by 0.1% to $2,613.70 per ounce.
Gold Sees Upside with Rate Cut Expectations as Fed Meeting Approaches
A weaker dollar has bolstered gold prices as markets anticipate the upcoming Fed meeting. The central bank is widely predicted to cut rates on Wednesday, with the market divided between a 25 or 50 basis point reduction.
Market sentiment is evenly split between the two options, with a larger cut gaining traction due to concerns about labor market weakness. Analysts foresee the beginning of an easing cycle this week, with expectations of at least 100 basis points of rate cuts by year-end.
Lower interest rates are favorable for precious metals as they reduce the opportunity cost of holding non-yielding assets. Silver rose 0.4% to $1,004.80 per ounce, while platinum climbed 0.8% to $31.332 per ounce.
Safe Haven Demand for Gold Spikes Amid Trump Assassination Attempt
Following reports of a second assassination attempt on Trump at his Florida golf course, gold saw an increase in safe haven demand. The attempt was thwarted by secret service agents in a reported shootout with the assailant, who was subsequently arrested. Trump reassured his safety in a message on his fundraising website.
Copper Prices Stable After Weak Chinese Data
Copper prices were supported by a softer dollar but were restrained by disappointing economic data from China, the largest copper importer globally. Benchmark copper on the London Metal Exchange rose 0.1% to $9,276.0 per ton, while one-month futures increased by 0.1% to $4.2225 per pound.
Recent data from China showed slower-than-expected growth in industrial output and retail sales for August, along with a rise in unemployment and a drop in fixed asset investment. These figures have raised concerns about an economic slowdown in China, potentially impacting its demand for copper. However, analysts suggest that the government may introduce stimulus measures to counteract the slowdown.