Monday, September 1, 2025 Gold hit a more than four-month high on Monday, as increased bets for a U.S. Federal Reserve interest rate cut this month lifted bullion allure, while silver rose above $40 per ounce for the first time in more than a decade.
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- Gold hit a 4-month high as traders bet on a September Fed rate cut.
- Silver crossed \$40/oz for the first time since 2011, supported by lower-rate hopes and tight supply talk.
- A U.S. appeals court ruling against most Trump-era tariffs pressured the dollar, adding fuel to bullion gains.
- Core PCE came in at 0.2% m/m, 2.6% y/y—in line—keeping cut odds alive.
- 1 What moved the market today
- 2 Why this matters (in plain English)
- 3 Deeper view: Is the rally durable?
- 4 What Indian investors (MCX watchers) should track
- 5 Week-ahead watchlist
- 6 Market Snapshot (Monday 1 Sept 2025)
- 7 FAQs :
- 7.1 Q1: Why did gold rise today?
- 7.2 Q2: Why is silver outperforming gold?
- 7.3 Q3: What are the risks to this rally?
- 7.4 Q4: How does this affect Indian investors?
- 7.5 Q5: Is this a good entry point for long-term investors?
- 7.6 Q6: Why does silver often outperform gold late in a cycle?
- 7.7 Q7: Does a rate cut guarantee higher gold?
- 7.8 Q8: What would invalidate the bullish view?
- 7.9 Share this post:
What moved the market today
- Fed rhetoric turned dovish: San Francisco Fed President Mary Daly signalled it may soon be time to recalibrate policy, keeping a 25 bps cut in play this month.
- Macro data cooperated: The PCE price index—the Fed’s preferred gauge—was tame enough to avoid derailing cut expectations.
- Policy/legal twist: A U.S. appeals court said most Trump tariffs are illegal, nudging the dollar lower and helping precious metals.
- Thin liquidity boost: A U.S. bank holiday amplified moves as volumes thinned.
Snapshot (as reported)
- Spot Gold: \$3,486.86/oz (highest since Apr 23)
- COMEX Gold (Dec): \$3,554.60
- Spot Silver: \$40.56/oz (highest since Sep 2011)
- Platinum/Palladium: \$1,384.68 / \$1,118.06
Why this matters (in plain English)
- Rate cuts reduce the “opportunity cost” of holding gold (which pays no interest). If cash/bonds yield less, gold looks better.
- Silver is higher-beta gold: When gold wakes up, silver often sprints, especially if supply feels tight and industry demand remains firm. The move above \$40 unlocks a psychological breakout that can attract momentum traders.
Deeper view: Is the rally durable?
- Bull case:
- Fed cut odds into September,
- Dollar vulnerability if tariffs fade and growth cools,
- Positioning tailwind—investors re-entering after a choppy summer. ([Reuters][2])
- Bear/Risk case:
- A hot jobs print or sticky wage growth could push cuts back,
- Tariff headlines can flip quickly,
- A sharp real-yield bounce would cap gold.
Bottom line: Above ~\$3,450, the path of least resistance for gold stays up; a decisive daily close above \$3,500 would keep \$3,550+ in play. For silver, holding \$40 turns that level into first support; sustained closes above \$41–\$41.5 would argue for momentum continuation. (Opinion/technical view.)
What Indian investors (MCX watchers) should track
- USD/INR: A softer dollar can offset global spikes when translated into rupees.
- Import duties & festive demand: Seasonal buying and policy changes can widen moves locally.
- Hedges: Jewellers and SMEs may consider options-based hedges to manage festive/Diwali exposure without over-margining.
Week-ahead watchlist
- US Non-Farm Payrolls & Unemployment
- ISM data & Fed speakers for any pushback on cut odds
- ETF flows (gold & silver) for confirmation of investor participation
US Rate-Cut Bets | Silver Breaks $40 | Highest Since 2011
Market Snapshot (Monday 1 Sept 2025)
| Asset | Price (Spot) | Change/High | Notes |
|---|---|---|---|
| Gold | $3,486.86/oz | 4-month high | Driven by Fed rate-cut expectations |
| COMEX Gold | $3,554.60 (Dec) | Futures rally | Traders pricing Sept cut |
| Silver | $40.56/oz | Highest since 2011 | Breaks psychological $40 barrier |
| Platinum | $1,384.68/oz | Stable | Industrial + investment demand |
| Palladium | $1,118.06/oz | Range-bound | Auto-sector sensitivity |
FAQs :
Q1: Why did gold rise today?
Gold surged on hopes of a September Fed rate cut, softer US dollar after the tariff ruling, and tame inflation (PCE data).
Q2: Why is silver outperforming gold?
Silver often moves faster than gold due to dual demand (investment + industry). Once gold rallies, silver typically accelerates—this time breaking $40 for the first time in 14 years.
Q3: What are the risks to this rally?
1.0A strong US jobs report or higher wage inflation could delay Fed cuts.
2. A rebound in real yields or dollar strength may cap gains.
3. Tariff policy news can quickly shift market sentiment.
Q4: How does this affect Indian investors?
1. MCX gold & silver will likely mirror global moves, but INR fluctuations can buffer or amplify impact.
2. Watch festive demand (Navratri–Diwali) and import duty changes for local price direction.
Q5: Is this a good entry point for long-term investors?
1. For gold: above $3,450, trend looks strong toward $3,550+.
2. For silver: holding above $40 is bullish; next resistance is $41–$41.5.
Q6: Why does silver often outperform gold late in a cycle?
Silver has dual demand (investment + industry). When macro softens and policy eases, investment demand rises while industrial demand doesn’t collapse immediately—magnifying moves.
Q7: Does a rate cut guarantee higher gold?
No. If cuts happen because growth is slumping, risk aversion helps gold. But if cuts are fully priced and yields don’t fall further, gold can stall.
Q8: What would invalidate the bullish view?
A strong upside surprise in U.S. growth/inflation that lifts real yields and dollar—plus hawkish Fed messaging.