(RTTNews) – Gold prices posted strong gains on Tuesday, surging for the third consecutive session, as investors continued to price in more interest rate cuts this year despite mixed comments by Federal Reserve officials.
Front Month Comex Gold for September delivery jumped by $39.90 (or 1.07%) to $3,780.60 per troy ounce. Notably, this is a new record high for gold prices.
Front Month Comex Silver for September delivery gained by 39.30 cents (or 0.90%) to $44.192 per troy ounce.
On the economic front, the S&P Global US Composite PMI fell to 53.6 in September from 54.6 in August. The reading indicates a second consecutive month of softer growth.
Input costs rose to their highest level since May, apparently driven largely by tariffs. Business confidence climbed to a four-month high.
The S&P Global US Manufacturing PMI eased to 52 in September from an over three-year high of 53 in August.
The S&P Global US Services PMI fell to 53.9 in September from 54.5 in the previous month, broadly coinciding with market expectations.
On September 17, in line with market expectations, the US Federal Reserve cut interest rates by 25 basis points to a range of 4.00% to 4.25% amid recent data showing a weakening job market.
Yesterday, Fed Governor Stephen Miran reiterated his call for substantially lower interest rates. Notably, at last week’s Fed meeting he had advocated for a 50 basis point rate cut.
Fed Bank of St. Louis President Alberto Musalem noted he sees limited room for more rate cuts. His Cleveland counterpart Beth Hammack also called for caution in easing policy.
With some Fed officials advocating a slow and steady approach, investors are weighing the mixed signals.
General consensus in the markets is running in favor of two more cuts before the end of the year.
The PCE price index, the Fed’s preferred reading on consumer price inflation, is due to be released this Friday.
According to CME Group’s FedWatch Tool, investors are betting on a 94.1% chance of a 25 basis point interest rate cut at the October 28-29 Fed meeting.
To end the Russia-Ukraine war sooner, US President Donald Trump suggested NATO nations stop buying oil from Russia whereby Russia would be cut off of the petrodollar gains and be compelled to agree to negotiations.
Trump even recommended the EU slap heavy sanctions on countries buying Russian oil.
However, the NATO member countries have not yet responded collectively.
Hungarian foreign minister shrugged off the idea, calling it a “nice dream” and stated that his nation will not halt purchases of Russian oil.
In the Middle East, tensions that surfaced after Israel attacked Hamas leaders in Doha on September 9 have yet to cool down. While Israel has vowed to flush out Hamas militants “wherever they are,” Arab nations are standing in solidarity with Qatar. They have yet to elaborate on how they propose to retaliate, though.
Mounting economic uncertainty, inflationary pressures, and escalating geopolitical tensions in Europe and the Middle East fueled safe-haven demand for gold.
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