Gold extends record run as US rate-cut bets lift appeal

Gold prices extended their record run on Wednesday, holding firm above the key $3,500 level, driven by growing investor confidence that the U.S. Federal Reserve will cut interest rates in September.

FUNDAMENTALS

* Spot gold was up 0.2% at $3,540.64 per ounce, as of 0054 GMT. * U.S. gold futures for December delivery gained 0.4% to $3,607.60.

* U.S. rate futures are pricing in a 92% chance of a 25-basis-point Fed rate cut at the end of the two-day policy meeting on September 17, according to CME Group’s FedWatch tool.

* Non-yielding gold typically performs well in a low-interest-rate environment. * SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 1.32% to 990.56 tons on Tuesday, the highest since August 2022.
* U.S. President Donald Trump said on Tuesday that Washington needed a “very serious” rate cut from the Fed.
* Trump has criticized the Fed and its chair, Jerome Powell, for months for not lowering interest rates, and recently took aim at Powell over a costly renovation of the central bank’s Washington headquarters.
* Investors are now looking forward to the U.S. non-farm payrolls data, due on Friday, to determine the size of the Fed’s expected rate cut later this month.

* The August non-farm payrolls are expected to have grown by 78,000 jobs, according to Reuters poll, versus 73,000 in July.

* Heightening uncertainty and potential trade tensions in the market, Trump’s administration said it will ask the Supreme Court for an expedited ruling on tariffs that a U.S. appeals court found illegal last week.

* Elsewhere, spot silver eased 0.2% to $40.81 per ounce, after hitting its highest since September 2011 in the previous session. Platinum gained 0.6% to $1,412.30 and palladium rose 1% to $1,145.69.

DATA/EVENTS (GMT)

0030 Japan S&P Global Comp Op Final SA September

0030 Japan S&P Global SVC PMI Final SA September

0145 China RatingDog Services PMI August

0750 France HCOB – Services, Composite PMI September

0755 Germany HCOB Services, Composite Final PMI September

0800 EU HCOB Services, Composite Final PMI September

0830 UK S&P GLOBAL PMI: COMPOSITE – OUTPUT August

0830 UK Reserve Assets Total August

1400 US Factory Orders MM July.