Gold Surges to Record High as Rate Cut Bets Intensify
Gold prices reached a new all-time high on Friday, fueled by expectations of interest rate cuts by the Federal Reserve and a recent slowdown in U.S. job growth. Spot gold rose 1.3% to $3,631.66 per ounce as of 9:59 a.m. EDT (1349 GMT),briefly hitting a record $3,636.69. December gold futures were up 0.5% to $3,670.80.
The rally comes after a jobs report revealed a significant deceleration in U.S. employment growth in August. Traders now assign a 90% probability to a quarter-point rate cut at the fed’s September meeting, wiht a 10% chance of a larger, 50-basis-point reduction, according to the CME FedWatch tool.Lower interest rates diminish the appeal of holding interest-bearing assets, making non-yielding gold more attractive.
“Continued labor market softness and expectations of ongoing Fed rate cuts into early 2026 could provide sustained support for bullion,” said Peter Grant, vice president and senior metals strategist at Zaner Metals. He anticipates gold’s momentum could extend toward $3,700-$3,730 in the near term, suggesting any dips in price should be viewed as buying opportunities.
Gold has experienced substantial gains this year, rising 38% after a 27% increase in 2024. this performance is supported by a weaker dollar, increased gold accumulation by central banks, accommodative monetary policies, and broader global economic uncertainty. Notably, China’s central bank continued its gold-buying streak for the tenth consecutive month in August.
benchmark 10-year U.S. Treasury yields are currently near their five-month low. Investors are now focused on upcoming U.S. producer price data, scheduled for release on Wednesday, and consumer price data on Thursday, for further insights into the Fed’s potential policy decisions.
“If weakness in U.S. data continues,then so too should the ongoing bullish momentum in gold,as both the U.S. dollar and yields fall further,” noted Fawad Razaqzada, market analyst at City Index and FOREX.com. Though, he cautioned that “if the U.S. data shows surprise resilience in the coming weeks, then that might cause gold to correct from these elevated levels.”
Other precious metals also saw gains: spot silver rose 1% to $41.39 per ounce, platinum increased 0.7% to $1,382.25, and palladium climbed 2.1% to $1,134.56.
