Gold demonstrated sustained bullish momentum on Tuesday, with gold futures extending their winning streak to three consecutive sessions. The December gold contract settled at $3,796.90, marking a gain of $15.70 or 0.42% for the session. The precious metal's rally has been particularly impressive, with futures climbing $119 or 3.24% over the three-day period, underscoring robust investor demand.
During intraday trading, gold futures touched a new record high of $3,824.60 before retreating slightly to close just below the psychologically significant $3,800 level. This near-miss of the $3,800 threshold highlights the metal's current strength while suggesting some profit-taking at elevated levels.
Silver futures presented a more subdued performance, closing essentially unchanged at $44.26 after declining $0.05 for the session. Despite Tuesday's modest retreat, silver has participated in the broader precious metals rally, gaining $2.15 or 5.11% over the same three-session period that has benefited gold.
The monthly performance for gold has been particularly noteworthy, with futures advancing 8% or $280 in September alone. This substantial gain ranks as the second-largest monthly increase in dollars ever, trailing only March's exceptional $290 advance. With several trading days remaining in September, gold futures are positioned to potentially challenge March's record for the largest monthly dollar gain on record.
Market participants are closely monitoring this Friday's release of the Personal Consumer Expenditure (PCE) data, which could significantly influence gold's trajectory for the remainder of the month. The PCE report serves as the Federal Reserve's preferred inflation gauge and could provide crucial insights into the central bank's future monetary policy direction, particularly regarding anticipated interest rate cuts.
Current market sentiment strongly favors monetary easing, as reflected in the CME's FedWatch tool. The probability-based indicator assigns a 94.1% likelihood to a rate reduction at the Federal Open Market Committee's next scheduled meeting on October 29th. Looking further ahead, traders are positioning for continued accommodation, with a 76.9% probability currently assigned to federal funds rates settling between 3.50% and 3.75% by the final FOMC meeting of 2025 on December 10th. Such a scenario would represent a 50-basis-point reduction from current levels.
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