Gold bulls are eyeing a $3,000 milestone

SPDR Gold Trust ETF holdings highest since Jan

Odds on 25 bps US rate cut next week to 57% – CME FedWatch

Palladium up 17% for the week

(Update prices from 1745 GMT)

By Anushree Ashish Mukherjee and Swati Verma

Sept 13 (Reuters) – Gold prices rose on Friday to hit record highs, as a resurgence in bullish momentum fueled by optimism that the U.S. Federal Reserve is on the verge of cutting interest rates was catalyzed by fund inflows and a fall in the dollar.

Spot gold was trading at record levels, up 0.9% at $2,582.04 an ounce by 1:45 p.m. ET (1745 GMT).

U.S. gold futures settled 1.2% higher at $2,610.70.

Gold market bulls are locking in the price of the precious metal rising to new records, with a milestone of $3,000 an ounce coming into focus, boosted by monetary easing from major central banks and a tight race for the US presidential election.

The stars aligned in favor of gold and silver market bulls as the European Central Bank cut its key interest rate this week, the Fed is likely to cut it next week and tame U.S. inflation data, Jim Wyckoff, senior market analyst at Kitco Metals, said.

Markets are fully pricing in a rate cut next week, with a 57% chance for a 25-bps US rate cut and a 43% chance for a 50-bps cut, the CME FedWatch tool showed. This would be the Fed’s first rate cut since 2020.

“The market still expects the Fed to cut rates by around 100 basis points by the end of the year, meaning rates would need to be cut by 50 basis points at one of the two remaining meetings after September,” Commerzbank analysts said.

“It is therefore likely due to these aggressive interest rate cut expectations for the coming months that the price of gold will rise.”

Further fueling interest in precious metals, the dollar on Friday fell to its lowest level this year against the Japanese yen.

Global physical-backed gold exchange-traded funds saw a fourth straight month of inflows in August, the World Gold Council said last week.

Holdings of the world’s largest gold-backed ETF SPDR Gold Trust were at their highest levels since early January on Thursday.

From a technical standpoint, the relative strength index of 69 suggests that the gold price is approaching “overbought” territory, starting at 70.

Palladium rose 2% to $1,067.43 and has

about 17% so far this week.

Spot silver rose 2.3% to $30.61 and platinum added 2.4% to $1,000.57.

(Reporting by Anushree Mukherjee and Swati Verma in Bengaluru; Editing by Vijay Kishore Shailesh Kuber and Alan Barona)