HSBC-Precious Metals Daily Gold surges on anticipated rate cuts；bulls in charge-20250926

Market focus, emerging trends

After some initial losses, gold regained upward momentum in Asian and Londontrading. Trading volume was not heavy, however. The market absorbed fresh US tariffsand a possible US government shutdown, which did not seem to impact the financialmarkets greatly, but may have supported gold. Although there was acute “risk-off”activity, gold prices moved higher before the US open. Silver and the PGMs continuedto outperform gold as China demand remained robust.

In US hours, gold received support from the August PCE release. The Commerce Deptreported that Personal Consumption Expenditures rose 2.7% y/y. The market did notdeem this high enough to dissuade the Fed from making further rate cuts. Consumerspending also rose 0.6% in August, but again, this was not seen as high enough to bea stumbling block to rate cuts. Gold enjoyed a more substantial boost from commentsmade by Fed Governor Michelle Bowman, who reiterated her view that the Fed needsto cut rates to ward off a slowing labor market. Addressing the Forecasters Club ofNew York, she also said that she supported a smaller balance sheet. The DXY andyields also eased slightly. Higher oil prices as Ukraine hit Russian oil installationsfurther aided gold. The white metals outdid gold to the upside. A force majeure at amajor copper mine lifted that metal and triggered a sharp silver rally. Announcementsin China of the need to cut carbon emissions (Reuters), also pushed silver higher.The PGMs, notably platinum rallied as underlying tightness persisted.