Gold rises on bargain hunting amid fading rate cut bets
Gold rose 0.8% on Monday as investors bought the dip after recent lows. The precious metal remains on track for its largest monthly decline since October 2008.
Gold prices climbed more than 1% on Monday as investors engaged in bargain-hunting, though the metal remains positioned for its steepest monthly decline in nearly twenty years. Rising energy costs linked to escalating geopolitical tensions have significantly reduced expectations for interest rate cuts in the United States this year.
Spot prices for the precious metal rose 0.8% to $4,529.58 per ounce, recovering from multi-month lows reached last week. Despite this rebound, the asset has dropped more than 14% throughout March, marking its worst monthly performance since the financial crisis in 2008. The downward pressure has been exacerbated by a stronger dollar, which gained momentum following military actions between Israel and Iran that began in late February.
The energy sector has added further complexity to the market environment. Brent Crude Oil extended its gains on Monday, supported by news that groups in Yemen launched strikes over the weekend. These developments have fueled concerns that prolonged high oil prices will keep inflation elevated, forcing central banks to maintain restrictive monetary policies.
Traders expect oil prices to remain elevated for a prolonged period, in a dynamic that is likely to fuel inflation and force central banks to adopt restrictive measures, keeping rates on hold or even prompting further hikes.
While bullion typically serves as a hedge against rising prices, the prospect of sustained high interest rates weighs on the demand for non-yielding assets. Market participants have almost entirely priced out the likelihood of a rate reduction in 2026. Investors are currently awaiting a scheduled address by Federal Reserve Chair Jerome Powell for further direction.
Other precious metals also saw gains during the session. Spot Silver increased 1.8% to $70.81 per ounce, while Platinum surged 3.7% to $1,931.25. Palladium also moved higher, climbing 3.6% to reach $1,426.89.
