Gold prices rose strongly during Monday’s trading to reach new record highs, amid a decline in the dollar against most major currencies and as markets assessed US monetary policy expectations.

Federal Reserve Board Governor Stephen Miran said in a speech today at the Economic Club of New York that interest rates should be cut sharply by around 2%, noting that the current level is “excessively restrictive” given recent economic changes.

In the same context, St. Louis Fed President Alberto Musalem warned that last week’s cut was a “precautionary step” and that there is limited scope for further easing.

Meanwhile, the dollar index fell against most major currencies at 20:09 GMT by 0.3% to 97.3, recording a high of 97.8 and a low of 97.3.

In trading, spot gold rose by 2% at 20:14 GMT to $3,780.40 an ounce.

Palladium prices rose during Monday trading amid a decline in the dollar against most major currencies and concerns over a shortage of the industrial metal.

In China, the world’s largest consumer of industrial metals, the central bank kept benchmark lending rates unchanged for the fourth consecutive month in September, in line with market expectations, following last week’s decision to hold the key policy rate steady.

The stable fixing of the Loan Prime Rate (LPR) reflects the authorities’ cautious approach toward monetary easing, at a time when US–China trade relations show some easing, alongside resilient exports and recent gains in the stock market, despite signs of domestic slowdown and the Federal Reserve’s move toward monetary easing.

The one-year LPR was left unchanged at 3.0% on Monday, while the five-year LPR also held steady at 3.5%.

A Reuters poll conducted last week of 20 market participants showed that all respondents expected no change in either rate, despite the recent wave of weak economic data.

The People’s Bank of China had also kept the seven-day reverse repo rate, which has now become the main policy tool, unchanged last week.

Recent data indicated that industrial output and retail sales in August recorded their weakest pace of growth since last year, highlighting economic challenges and a slowdown in domestic activity.

For his part, US President Donald Trump said that he and his Chinese counterpart Xi Jinping had made progress on a deal concerning the implementation of TikTok, and that they will meet face-to-face in six weeks in South Korea to discuss trade issues, illicit drugs, and Russia’s war in Ukraine.

At the same time, Chinese equities continued to post strong gains, with the Shanghai Composite Index (.SSEC) hovering near its highest levels in a decade.

Elsewhere, the US dollar index fell by 0.1% to 97.5 points by 15:38 GMT, after recording a high of 97.8 and a low of 97.3 points.

In trading, palladium futures for December delivery rose 2.98% to $1,204.5 per ounce by 15:39 GMT.

Bitcoin fell sharply on Monday, retreating from the one-month high it reached last week, as investors ignored the Federal Reserve’s interest rate cut and waited for clearer signals on the US economy along with a flood of remarks from central bank officials on monetary policy.

The world’s largest cryptocurrency was last trading at $112,843, down 2.5% by 02:11 a.m. Eastern Time (06:11 GMT), after pulling back from last week’s peak near $118,000, its strongest level since mid-August.

Bitcoin ended last week largely steady, as caution about the future path of monetary easing offset gains driven by optimism over the Fed’s rate cut. In the meantime, altcoins suffered steeper losses on Monday, with Ethereum plunging by nearly 10%.

Sentiment in crypto markets also came under pressure after Praetorian Group International, a cryptocurrency trading company, pleaded guilty before the US Department of Justice to operating a Ponzi scheme that cost more than 90,000 investors at least $62 million.

Crypto markets are also facing investor doubts over corporate treasuries such as Strategy (formerly known as MicroStrategy – NASDAQ:MSTR), amid rising questions about their long-term sustainability.

Traders Await Fed Speeches to Map Rate Path

The decline came after the Fed cut rates by 25 basis points last week, which initially supported demand for risk assets by weakening the dollar and lowering financing costs.

But Fed Chair Jerome Powell’s balanced remarks following the decision, stressing that any future moves will depend on incoming economic data, curbed expectations of entering a strong easing cycle.

Investors are now awaiting comments this week from more than 10 Fed officials, including Powell, which could provide further clarity on the monetary policy outlook. The release of the core Personal Consumption Expenditures (PCE) price index – the Fed’s preferred inflation gauge – is also scheduled for Friday.

A hawkish tone is likely to pressure Bitcoin and other risk assets, while hints of additional cuts could reignite momentum.

Despite the recent pullback, Bitcoin remains up about 5% in September, supported by improving liquidity conditions. It has also gained more than 20% since the start of 2025, thanks to institutional inflows and optimism over broader adoption, but it is still well below its all-time high above $124,000 earlier this year.

Oil prices showed little change on Monday, as concerns over developments in Russia and the Middle East balanced with worries tied to oversupply.

Brent crude futures, which have traded between about $65.50 and $69 per barrel since early August, fell by 12 cents or 0.2% to $66.56 a barrel by 10:00 GMT. US West Texas Intermediate (WTI) crude for October delivery slipped 3 cents or 0.1% to $62.65 a barrel.

The October WTI contract expires on Monday, while the more active November contract fell 18 cents or 0.3% to $62.22 a barrel.

The Polish armed forces, a NATO member, said Polish and allied aircraft were deployed early Saturday to secure the country’s airspace after Russia carried out airstrikes targeting western Ukraine near the Polish border.

The deployment followed an incident on Friday when three Russian military aircraft violated the airspace of NATO member Estonia for 12 minutes.

In the Middle East, four Western countries recognized a Palestinian state, prompting an angry response from Israel and adding to concerns in the oil-rich region.

Brent and WTI had ended Friday’s session down more than 1%, posting a slight weekly decline under pressure from ample supplies and weakening demand.

Analysts at SEB Bank said: “The current state of the oil market indicates that global demand for oil will fall from the third quarter to the fourth, and again into the first quarter of 2026. At the same time, OPEC+ production is on an upward path.”

They added: “The big question, of course, is whether China will absorb the growing surplus into storage, or if oil prices will fall into the $50s range. We favor the latter scenario.”

Iraq’s state oil marketer SOMO said the country, OPEC’s second-largest producer, has raised oil exports under the OPEC+ agreement.

SOMO expects September exports to average between 3.4 and 3.45 million barrels per day.

Baghdad has also given preliminary approval to a plan to resume oil exports via pipeline from the semi-autonomous Kurdistan region through Turkey, after delays to a restart that had been expected, according to sources familiar with the talks cited by Reuters.