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Gold Rallies to Record High on US Rate Cut Optimism

FILE PHOTO: A saleswoman displays a gold necklace inside a jewellery showroom on the occasion of Akshaya Tritiya, a major gold buying festival, in Kolkata, India, May 7, 2019. REUTERS/Rupak De Chowdhuri/File Photo/File Photo
FILE PHOTO: A saleswoman displays a gold necklace inside a jewellery showroom on the occasion of Akshaya Tritiya, a major gold buying festival, in Kolkata, India, May 7, 2019. REUTERS/Rupak De Chowdhuri/File Photo/File Photo
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Gold Rallies to Record High on US Rate Cut Optimism

FILE PHOTO: A saleswoman displays a gold necklace inside a jewellery showroom on the occasion of Akshaya Tritiya, a major gold buying festival, in Kolkata, India, May 7, 2019. REUTERS/Rupak De Chowdhuri/File Photo/File Photo
FILE PHOTO: A saleswoman displays a gold necklace inside a jewellery showroom on the occasion of Akshaya Tritiya, a major gold buying festival, in Kolkata, India, May 7, 2019. REUTERS/Rupak De Chowdhuri/File Photo/File Photo

Gold prices soared to an all-time high on Friday as the dollar weakened amid prospects of super-sized reduction in US interest rates next week, while palladium has gained over 15% so far this week.
Spot gold was up hitting a record 0.3% at $2,567.23 per ounce by 0703 GMT, after high of $2,570.21 earlier in the session. Bullion has gained about 3% for the week so far, Reuters reported.
US gold futures rose 0.6% to $2,595.10.
The dollar fell to a one-week low on Friday, making greenback-priced gold less expensive for other currency holders, with investors on tenterhooks around uncertainty of a 25 or 50 basis point US rate cut next week.
"Regardless of the size of the initial Federal Reserve rate cut, we look to be on the verge of a potentially long and frequent easing cycle, which is a scenario that bodes well for assets such as gold, which are non-yielding," said Tim Waterer, chief market analyst at KCM Trade.
The International Monetary Fund said it was appropriate for the Fed to begin a long-awaited monetary easing cycle at its meeting next week as upside risks to inflation have subsided.
Traders see a 41% chance of a 50-bp reduction and 59% odds of a 25 bp cut.
Investors will scan the US consumer sentiment (preliminary) data, due later in the day, for further clues on rate outlook.
ANZ commodity strategist Soni Kumari said "we are seeing (gold) prices can go to $2,600 in the short term, given the price momentum is looking quite strong right now."
Spot silver rose 0.3% to $30.01 and platinum gained 0.7% to $983.95. Both metals are headed for weekly gains.
Palladium climbed 0.4% to $1,050.50 and was headed for its best week since December 2023, fueled by export curb concerns.
Russian President Vladimir Putin said Moscow should consider limiting exports of uranium, titanium and nickel in retaliation against the West.

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Trump Says He Will End All Taxes on Overtime if Elected 

Republican presidential nominee former President Donald Trump motions while attending the 9/11 Memorial ceremony on the 23rd anniversary of the Sept. 11, 2001 terror attacks, Wednesday, Sept. 11, 2024, in New York. (AP)
Republican presidential nominee former President Donald Trump motions while attending the 9/11 Memorial ceremony on the 23rd anniversary of the Sept. 11, 2001 terror attacks, Wednesday, Sept. 11, 2024, in New York. (AP)
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Trump Says He Will End All Taxes on Overtime if Elected 

Republican presidential nominee former President Donald Trump motions while attending the 9/11 Memorial ceremony on the 23rd anniversary of the Sept. 11, 2001 terror attacks, Wednesday, Sept. 11, 2024, in New York. (AP)
Republican presidential nominee former President Donald Trump motions while attending the 9/11 Memorial ceremony on the 23rd anniversary of the Sept. 11, 2001 terror attacks, Wednesday, Sept. 11, 2024, in New York. (AP)

Republican US presidential candidate Donald Trump said on Thursday that he will end all taxes on overtime pay as part of a wider tax cut package, if he is elected in the Nov. 5 election.

"As part of our additional tax cuts, we will end all taxes on overtime," Trump said in remarks at a rally in Tucson, Arizona. "Your overtime hours will be tax-free."

Trump, who faces Democratic Vice President Kamala Harris in what polls show to be a tight race, has previously said he would seek legislation to end the taxation of tips to aid service workers. Harris has made a similar pledge.

"He is desperate and scrambling and saying whatever it takes to try to trick people into voting for him," a Harris campaign spokesperson said in response to Trump's proposal on Thursday.

At a campaign event this month with union workers, Harris accused Trump of "blocking" overtime from millions of workers during his 2017-2021 presidency.

In 2019, the Trump administration issued a rule increasing the eligibility of overtime pay to 1.3 million additional US workers, replacing a more generous proposal that had been introduced by President Barack Obama, Trump's Democratic predecessor.

The Trump administration raised the salary level for exemption from overtime pay to $35,568 a year, up from the long-standing $23,660 threshold. Workers’ rights groups criticized the move, saying it covered far fewer workers than the scheme introduced under Obama.

Under Obama, the Labor Department proposed raising the threshold to more than $47,000, which would have made nearly 5 million more workers eligible for overtime. That rule was later struck down in court.

Overtime pay at these income levels overwhelmingly benefits blue-collar workers, such as fast-food workers, nurses, store assistants and other low-income employees.

"The people who work overtime are among the hardest working citizens in our country and for too long no one in Washington has been looking out for them," Trump said on Thursday.

Under Labor Department rules, eligible workers must be paid at least time-and-a-half for hours worked above 40 hours in a single work week.

As of last month, American factory workers in non-supervisory roles put in an average of 3.7 hours of overtime a week, data from the Bureau of Labor Statistics shows.

Not taxing overtime would result in less government revenue, at a time when Trump's plan to permanently extend the tax cuts he passed as president would expand the US deficit by $3.5 trillion through 2033, according to the non-partisan Congressional Budget Office. The US budget deficit in the first 11 months of this fiscal year is $1.9 trillion.

It's unclear how much revenue the government receives from taxes on overtime pay.

Trump's proposal would be a first for the federal government. Alabama this year became the first state to exclude overtime wages for hourly workers from state taxes as a temporary measure that won legislative support in part to help employers fill jobs in a tight labor market. The exemption is for 18 months only.