Gold surged to a record high on Monday, buoyed by investors' heightened expectations of a dovish rate-cut path, ahead of remarks by multiple Federal Reserve officials and key inflation data later in the week.
Spot gold rose 1.2% to $3,726.42 per ounce, as of 1132 GMT, after hitting a new record high of $3,728.22 earlier in the session. US gold futures for December delivery climbed 1.5% to $3,760.90.
"I would expect gold to reach new record highs this week with Fed officials likely to indicate further rate cuts, but also being data-dependent on the pace and magnitude of cuts," said UBS analyst Giovanni Staunovo, Reuters reported.
Several Federal Reserve officials are slated to speak this week, with Chair Jerome Powell set to deliver remarks on Tuesday, as investors closely monitor their commentary for clues about the future direction of monetary policy.
The market is also focused on the release of the US core personal consumption expenditure price data, due on Friday, for cues on the pace of further rate cuts.
The Fed lowered interest rates by 25 basis points last week, its first cut since December, and signalled openness to further easing.
Investors are now expecting two more 25-bps rate cuts this year, one each in October and December, with a 92% and 81% chance, respectively, according to the CME FedWatch tool.
"There is a shift in the factors supporting gold. So far it was central banks and Asian demand, now we are also starting to see Western investors looking to add gold, visible in gold ETF holdings, driven by expectations of falling US rates," Staunovo said.
Bullion has gained more than 42% this year, driven by broader geopolitical and economic uncertainty, central bank buying and monetary policy easing.
Spot gold may test resistance at $3,705 per ounce, and a break above that could lead to a gain into a range of $3,719 to $3,739.
"We continue to see further upside, with gold expected to reach $3,900 by mid-2026," Staunovo said.
Spot silver rose 1.6% to $43.76 per ounce, a more than 14-year high. Platinum gained 1.1% to $1,419.42 and palladium rose 1.9% to $1,170.75.
