Gold prices surged to a new all-time high of $3,747 on Monday, signaling potential further gains as the US Dollar weakens amid growing expectations of Federal Reserve (Fed) easing later this year. XAU/USD currently trades above $3,745, up more than 1.6%.
Bullion surges amid easing speculation and geopolitical tensions
Market sentiment remains bullish as investors anticipate rate cuts in both of the remaining Fed policy meetings in 2025. The US Dollar Index (DXY), which measures the greenback against a basket of six major currencies, fell 0.3% to 97.39.
Gold also benefited from persistent geopolitical uncertainty, as the Russia–Ukraine conflict shows no signs of near-term resolution. Reuters reported that “Russia’s defence ministry said on Monday its forces had taken control of the settlement of Kalynivske, in Ukraine’s Dnipropetrovsk region.”
Fed commentary continued on Monday with multiple officials sharing their views, including Atlanta Fed President Raphael Bostic, Richmond Fed President Thomas Barkin, St. Louis Fed President Alberto Musalem, Fed Governor Stephen Miran, and Cleveland Fed President Beth Hammack.
Meanwhile, Societe Generale noted that central banks’ gold purchases rebounded to 63 tonnes in 2025, matching the post-2022 average, providing further support to bullion prices.
Looking ahead, more Fed officials—including Chair Jerome Powell—are expected to comment this week. Key economic data releases, including S&P Global Flash PMIs, Durable Goods Orders, Q2 GDP final reading, and the Fed’s preferred inflation gauge, the Core Personal Consumption Expenditures (PCE) Price Index, will provide additional insight into the US economic outlook.
Daily market movers: gold supported amid higher US Treasury yields
US Treasury yields climbed, with the 10-year note rising 1.5 bps to 4.145%. Real yields, which typically move inversely to gold prices, edged up 1 bp to 1.755%.
Atlanta Fed President Raphael Bostic said he remains cautious on rate cuts in October due to inflation concerns but acknowledged increasing risks to employment. St. Louis Fed President Alberto Musalem expressed support for easing as a precautionary measure to support the labor market, while maintaining an inflation-focused policy. He highlighted that tariffs are adding to inflation, though the full impact is not yet realized.
Fed Governor Stephen Miran described policy as very restrictive, projecting the neutral fed funds rate around 2%. Richmond Fed President Thomas Barkin noted that some tariff costs are being absorbed by consumers, with economic uncertainty beginning to ease. Cleveland Fed President Beth Hammack observed a tight labor market, with low hiring and low firing, while highlighting persistent inflation risks.
Swiss gold exports to the US plunged 99% in August after US Customs imposed tariffs on gold bars. China stepped in, boosting shipments from 9.9 tonnes to 35 tonnes, the highest since May 2024, while exports to India also increased.
The Fed is widely expected to cut rates by 25 bps at its October 19 meeting, with Prime Market Terminal data showing an 89% probability of a cut and an 11% probability of a hold.
Technical outlook: Gold eyes $3,750 and beyond
Gold is poised to test new highs, with initial resistance at $3,750, followed by $3,800. On further strength, levels of $3,900 and $4,000 could come into focus.
The Relative Strength Index (RSI) remains overbought above 70, indicating bullish momentum is building.
On the downside, a drop below $3,700 could open the way for a retest of $3,650, the September 11 low of $3,613, and the $3,600 level.
