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| Gold Prices |
Fed Rate Cut Speculation Drives Gold to Record Highs
Gold surged past $3,600 per ounce for the first time on Monday, reaching an all-time high of $3,636.71. This rally reflects growing market expectations that the Federal Reserve will cut interest rates soon. The softer US jobs data, including a slowdown in hiring and rising unemployment, strongly supports the probability of a rate cut in the Fed’s September 16-17 meeting. Consequently, gold gained roughly 1.3%, continuing the bullish momentum established last week.
Market Reaction and Future Outlook for Gold Prices
US gold futures also rose, albeit more modestly by 0.6%, trading near $3,676 per ounce. Investors anticipate up to three additional Fed rate cuts by the end of 2025, which will likely increase gold demand since gold yields no interest. Analysts from UBS and Swissquote forecast further price increases, expecting gold to reach $3,700 per ounce by mid-2026. Central bank buying and ongoing geopolitical uncertainties further support gold’s appeal as a safe-haven asset.
Additional Factors Influencing Gold Market Dynamics
Looking ahead, US economic data releases, including revised jobs numbers and inflation reports, will test gold’s upward trajectory. Moreover, political developments such as a pending ruling on Fed Governor Lisa Cook’s potential removal could significantly impact central bank independence and investor sentiment. Goldman Sachs analysts even suggest gold could spike near $5,000 if the Fed’s autonomy weakens. Recently, President Trump exempted gold from proposed global tariffs, easing supply concerns and supporting market stability.
ScrapInsight Commentary
Gold’s record rally reflects strong market conviction on upcoming Fed rate cuts amid weakening US labor data. Central bank buying and geopolitical risks sustain gold’s role as a strategic asset. However, near-term price volatility remains, contingent on economic reports and political developments affecting monetary policy.
