On Monday, September 22, the price of gold reached a historic high at the opening due to the inflow of funds from exchange-traded funds (ETFs) hitting the highest level in three years. Investors are betting that the Federal Reserve (Fed) will continue its interest rate cut cycle. Silver also rose in sync, with a gain of over 50% so far this year.
Gold soared to $3,745.43 per ounce during Monday’s trading session, marking a fifth consecutive week of increase. Prior to that, on September 17, the Fed announced a rate cut and hinted at further policy easing by the end of the year. According to data compiled by Bloomberg, ETFs backed by gold surged 0.9% on Friday, September 19, marking the largest percentage increase since 2022.
Gold and silver have been among the best-performing commodities this year, supported by multiple favorable factors including the Fed’s loosening of monetary policy, continued buying of reserves by central banks worldwide, and ongoing geopolitical tensions driving up demand for safe-haven assets. Major banks like Goldman Sachs are predicting further upward potential for gold prices.
Soni Kumari, commodity strategist at ANZ Group Holdings Ltd., stated, “From a technical standpoint, the market looks quite strong, with expectations of further rate cuts rising.” She added that silver “has broken through the $43 per ounce resistance level, and gold broke through $3,708, indicating prices may continue to rise.”
Traders this week will closely monitor U.S. data such as August Personal Consumption Expenditures (PCE). This is a key inflation indicator that the Fed watches, and if it shows a slowdown, it may further justify rate cuts. In addition, Fed Chairman Jerome Powell is set to deliver a speech on Tuesday, September 23, about the economic outlook.
However, some analysts caution against the rapid rise in gold prices.
An analyst from Heraeus Precious Metals GmbH & Co KG stated on Monday that “Gold prices have risen by over 10% in the past five weeks, indicating overbought conditions. This increases the possibility of a consolidation period, with gold prices potentially trading sideways or slightly retracing in the short term.”
On Monday, silver outpaced gold in its upward momentum, possibly supported by bullish options trading. Last Friday, the trading volume of call options for iShares Silver Trust ETF surged to 1.2 million contracts, the highest level since April 2024, indicating a significant increase in bullish sentiment.
As of 1:47 PM New York time, spot gold was up 1.63% at $3,745.86 per ounce, while silver rose 2.13% to $44.01. Platinum and palladium prices showed mixed movement.