NEW YORK, Sept 1:  Gold surged to a more than four-month high on Monday as expectations of a U.S. Federal Reserve interest rate cut this month boosted demand for bullion, while silver jumped above $40 per ounce for the first time since 2011.

Spot gold rose 1.2% to $3,486.86 per ounce by 0641 GMT, its highest level since April 23. U.S. gold futures for December delivery were up 1.1% at $3,554.60.

“Dovish comments from San Francisco Fed President Mary Daly helped traders look past a higher core PCE reading on Friday and kept the door open for a 25-basis-point rate cut this month,” said Matt Simpson, senior analyst at City Index.

A U.S. appeals court ruling deeming most of former President Donald Trump’s tariffs illegal also weighed on the dollar, lending further support to gold, Simpson added.

Data on Friday showed the U.S. personal consumption expenditures (PCE) price index rose 0.2% month-on-month and 2.6% year-on-year, both in line with expectations. In a social media post, Daly reiterated her support for a rate cut, citing risks to the labour market.

Non-yielding gold tends to benefit from lower interest rates.

On trade, U.S. Trade Representative Jamieson Greer said Sunday that the Trump administration continues discussions with partners despite the court ruling on tariffs.

Spot silver jumped 2.2% to $40.56 per ounce, its highest since September 2011.

“The U.S. bank holiday is contributing to thinner liquidity, which is also exacerbating some of the moves in gold and silver,” said Tim Waterer, chief market analyst at KCM Trade. “Silver is moving higher on expectations of lower U.S. rates, while a tight supply market is helping maintain an upward bias.”

Platinum gained 1.5% to $1,384.68, while palladium rose 0.8% to $1,118.06.