Gold Surges to Record High as Rate Cut Bets Intensify
Gold prices reached a new all-time โคhigh on โFriday, fueled by expectations of interest rate cuts by the Federal Reserve โคandโฃ a recent slowdown in U.S. job growth. Spotโ gold rose 1.3% to $3,631.66 per โounce as of 9:59โ a.m. EDT (1349 GMT),briefly โhitting aโ record โ$3,636.69. December gold futures were up 0.5% toโ $3,670.80.
The โrally โขcomes after a jobs report revealed a significant deceleration in U.S. employment growth in August. โTraders now assign a 90%โฃ probability to a quarter-point rate โคcut at the fed’s September meeting, wiht a 10% chance ofโ a larger, 50-basis-point reduction, according to the CMEโ FedWatch tool.Lower interest rates diminish the appeal of holding interest-bearing assets, making non-yielding gold more โattractive.
“Continued โฃlabor โmarket softness and expectations of ongoing โคFedโ rate cuts intoโฃ early 2026 could provide sustainedโข support for bullion,” said Peterโ Grant,โ vice โpresident and senior metalsโฃ strategist atโฃ Zaner Metals. Heโ anticipates gold’s momentum could extend toward $3,700-$3,730 in the near term, suggestingโ any โคdips in priceโฃ should be viewedโ as buying opportunities.
Gold has experienced substantial gainsโ thisโ year, rising 38% โafter a 27%โฃ increase in 2024. โฃthis โperformance is supported by a weaker dollar, increased gold accumulation byโ centralโค banks, accommodativeโ monetary policies, andโค broader global economic uncertainty. Notably, China’s central bank continued itsโค gold-buying streak for the tenth consecutive โmonth โขin August.
benchmark 10-year U.S. Treasury yieldsโ are currently near their five-month low. Investors are โnow focused โคon upcoming U.S. โproducer price โdata, โscheduled for release on โWednesday, andโ consumer price dataโฃ on Thursday, for further insightsโ into the Fed’s potential policy decisions.
“If weaknessโ in โขU.S. data continues,then so too should the ongoing bullishโ momentum in gold,as both the U.S. dollar and yields fall โfurther,” noted Fawad Razaqzada, market โanalyst atโค City Index and FOREX.com. Though, heโ cautioned that “if the โฃU.S. dataโฃ shows โsurprise resilience in the coming weeks, then that โคmight cause goldโค to correct from these elevatedโ levels.”
Other precious metals also saw gains: spot silver rose 1% โฃto โฃ$41.39 โขper ounce, platinum โincreased 0.7% to $1,382.25, and palladium climbed โ2.1% to $1,134.56.