Gold prices climbed on Monday as investors dialed back expectations for another Federal Reserve interest-rate hike this month. The shift came after remarks by Fed Chair Kevin Warsh, which were interpreted as favoring a hold on rates when the central bank meets next week. Spot gold rose 0.4% to $4,180.29 an ounce, while U.S. gold futures gained 0.5% to $4,200.92. Silver and platinum also saw gains, advancing 1.3% each, while palladium climbed 1.5%. The U.S. dollar remained little changed.
The probability of a quarter-point rate hike dropped to less than 20% following Warsh’s comments. Earlier, a stronger-than-expected U.S. inflation reading had boosted expectations for further tightening and strengthened the dollar. Higher borrowing costs typically weigh on gold, as it does not pay interest. Despite this, gold has held above the key $4,000-an-ounce support level since August, supported by safe-haven demand.
ANZ analysts noted that fiscal and debt-sustainability concerns are making elevated yields appear less like a sign of stronger growth and more like a reason to hold gold as a hedge. Chinese investors have continued to favor gold amid weakness in equity and property markets, while central banks are diversifying their reserves. ANZ expects gold’s upside to remain capped in the short term before prices move above $5,000 an ounce in 2027, depending on investment and central-bank demand.