Gold prices hovered close to an all-time high, buoyed by mounting expectations of imminent interest rate cuts in the US and renewed political pressure from Donald Trump on the Federal Reserve to act aggressively.
Spot gold rose 0.5 per cent to $3,650.23 an ounce, within touching distance of the $3,673.95 record set earlier in the week. The metal has advanced 1.8 per cent so far, towards its fourth straight weekly gain. Futures for December delivery climbed 0.4 per cent to $3,689.10.
The rally reflects growing conviction among traders and economists that the Fed will cut rates at its September 17 meeting, after an increase in jobless claims to their highest level since October 2021 signalled deepening strains in the labour market. Almost all 107 economists surveyed in a Reuters poll predicted a 25 basis-point cut.
“Markets are positioning for a series of cuts, not just a one-off adjustment. Given these tailwinds and the pick-up in ETF inflows, we now expect gold to reach $3,900 an ounce by mid-2026,” said Giovanni Staunovo, analyst at UBS. “
The bullish momentum comes as Trump intensifies pressure on Fed chair Jerome Powell. The former president on Wednesday repeated his demand for lower policy rates, arguing that high borrowing costs risk prolonging economic weakness ahead of next year’s election. While the Fed operates independently, political commentary has historically influenced market psychology around rate cycles.
Gold, a non-yielding asset, tends to outperform in lower-rate environments, as its opportunity cost relative to interest-bearing assets diminishes. It has gained about 39 per cent this year, fuelled by a weaker dollar, heavy central bank purchases, particularly from emerging economies seeking to diversify reserves.
Elsewhere, policy shifts in China added further momentum to bullion markets. The People’s Bank of China on Friday said it was seeking public feedback on plans to streamline licensing for gold imports and exports. Analysts said the move could smooth supply chains for the world’s largest consumer of physical gold, further underpinning demand.
Other precious metals also gained. Silver rose 1.7 per cent to $42.27 an ounce, its highest in 14 years, while platinum increased 0.9 per cent to $1,391.50 and palladium climbed 1.6 per cent to $1,206.81. All three were set to notch weekly advances.
