Gold prices are surging, reaching a six-week high as market sentiment increasingly anticipates a US interest rate cut. This anticipation stems from dovish Federal Reserve commentary and weaker-than-expected economic data following a prolonged government shutdown. Central bank buying and strong ETF inflows have added fuel to gold’s already impressive year.
- Gold prices reached approximately $4,240 per ounce.
- This is the highest level in six weeks.
- The rise is attributed to increased expectations of a US interest rate cut.
- Markets are pricing in an 87% probability of a 25bps rate reduction.
- Investors are watching US private payrolls data and PCE figures for further clues on the Fed’s policy.
- Gold has gained in almost every month this year, potentially leading to its best annual performance since 1979.
- Robust central-bank buying and strong ETF inflows are supporting gold’s rise.
The favorable conditions suggest a potentially strong near-term outlook for the asset. The expectation of lower interest rates, coupled with strong buying activity, could continue to drive prices upward. Economic data releases will be closely watched to confirm the current trajectory of monetary policy, which is a key factor influencing the asset’s value.