Gold prices soared past the historic $3,800-per-ounce mark for the first time on Monday, driven by a weakening U.S. dollar and mounting expectations of further interest rate cuts by the Federal Reserve this year.

Spot gold rose 1.1% to $3,801.88 per ounce by 0435 GMT, while U.S. gold futures for December delivery climbed 0.6% to $3,831.90. The U.S. dollar index slipped 0.2%, making dollar-denominated gold more attractive to international buyers.

The rally follows Friday’s release of the U.S. Personal Consumption Expenditures (PCE) Price Index, which showed a 0.3% rise in August, slightly higher than July’s 0.2% increase but in line with economist forecasts. Analysts say the modest inflation data has bolstered market confidence in upcoming rate cuts.

“There’s growing conviction that the Fed will ease rates in October and again in December,” said Kyle Rodda, analyst at Capital.com. “Bullish sentiment is strong, and we may see another record high this week, though the market’s long positioning could temper further gains.”

According to the CME FedWatch Tool, traders are pricing in a 90% chance of a rate cut in October and a 65% likelihood of another in December. Gold typically performs well in low interest rate environments and during periods of economic or geopolitical uncertainty.

Asian equity markets opened cautiously on Monday amid concerns over a potential U.S. government shutdown. Investors are now focused on upcoming U.S. economic indicators, including job openings, private payrolls, ISM manufacturing PMI, and the non-farm payrolls report.

Meanwhile, the SPDR Gold Trust, the world’s largest gold-backed ETF, reported a 0.89% increase in holdings to 1,005.72 metric tons on Friday.

Other precious metals also posted gains:

• Silver rose 2.4% to $47.08 per ounce
• Platinum climbed 3.4% to $1,622.04
• Palladium gained 2.2% to $1,297.67