Gold prices experienced a slight decline on Thursday as they hovered near record highs, with investors keenly anticipating the release of U.S. consumer inflation data later in the day. Spot gold managed to rise 0.2% to $3,687.67 per ounce, following an earlier session peak of $3,702.95. Concurrently, U.S. gold futures for December delivery saw a modest increase of 0.1%, reaching $3,724.
The recent surge in gold prices has been attributed to a combination of factors, including heightened safe-haven demand, aggressive bets on potential rate cuts by the Federal Reserve, and a weakening dollar. Zain Vawda, an analyst at MarketPulse by OANDA, commented, “Global growth uncertainty and geopolitical risk continue to keep haven demand high, but the gold rally is being driven largely by anticipation of aggressive rate cuts from the Federal Reserve.”
Market expectations suggest a near-certain 25-basis-point rate cut during the conclusion of the Federal Reserve’s two-day meeting on September 17, with some speculating about a 50-basis-point reduction. This sentiment is echoed by U.S. President Donald Trump, who recently called for a more significant cut from Fed Chair Jerome Powell via social media.
The current environment favors non-yielding bullion, particularly in low-interest rate conditions. In tandem with rising gold prices, the U.S. dollar has plummeted to its lowest levels in over two months against its counterparts, making gold more affordable for holders of other currencies. Independent metals trader Tai Wong remarked, “Gold is surging on a sharply weaker dollar, which is at lows not seen since July,” while also indicating the potential for profit-taking as caution looms ahead of the Federal Reserve’s decision.
Since the beginning of the year, gold has skyrocketed approximately 41%, breaking through the $3,600-per-ounce threshold on September 8. According to analysts, this incredible rally is fueled by sustained central bank purchases, intensified safe-haven buying, and a global trend away from relying too heavily on the U.S. dollar.
In addition to gold’s performance, other precious metals showed mixed trends. Spot silver dipped 0.6% to $42.44 per ounce after reaching its highest level since September 2011 earlier in the day. Meanwhile, platinum decreased by 0.8% to $1,389.50, and palladium fell 0.6% to $1,176.97.
