HG MARKETS:

Gold prices rose slightly on Monday, staying near last week’s record highs. This was primarily driven by the Federal Reserve’s recent interest rate cut and the expectation of more cuts to come. The Fed lowered rates by 25 basis points last week, citing growing risks to the labor market, and hinted at further reductions if the labor market continues to weaken.

Lower interest rates make non-yielding assets like gold more attractive by reducing the “opportunity cost” of holding them. Despite some strength in the dollar, gold’s outlook remains positive, with markets predicting at least 50 more basis points in rate cuts this year. Other metals, including copper, also saw gains following the Fed’s move.

This week, markets will be focused on several key U.S. economic reports that could influence the Fed’s next steps. These include:

Speeches from various Fed officials, including Chairman Jerome Powell on Tuesday.

The PCE price index (the Fed’s preferred measure of inflation), which is expected to show that inflation remained high in August.

Other data such as manufacturing and services activity, as well as the final reading for second-quarter GDP.