Advertisement
Gold hovered near a two-week peak on Thursday, supported by rising expectations that the Federal Reserve will lower interest rates in September.
By 09:00 ET (13:00 GMT), spot gold edged up 0.1% to $3,398.42 per ounce, while October gold futures gained 0.3% to $3,456.90 per ounce.
Traders continued to increase wagers on a September rate cut after recent political turmoil around the central bank. President Donald Trump’s attempt to dismiss Fed Governor Lisa Cook sparked a legal standoff, raising questions over the Fed’s independence. Cook is expected to remain in her role while the courts decide, but the move unsettled markets and reinforced expectations that monetary easing is likely.
Fed fund futures now price an 84.9% chance of a 25 basis point cut in September, up from 78.4% a week earlier, according to CME’s FedWatch Tool.
Chair Jerome Powell last week signaled that rate cuts are “possible” but stopped short of committing, citing mixed signals from the economy. He acknowledged signs of cooling in the labor market but flagged uncertainty around the inflationary impact of Trump’s policies.
The dollar weakened earlier this week on growing rate cut bets, helping lift gold and other metals. While the greenback clawed back some ground, bullion prices remain well supported by the prospect of easier monetary policy.
Spot platinum slipped 0.1% to $1,347.25/oz, while silver extended gains, climbing 1.2% to $39.19/oz. Industrial metals also strengthened, with benchmark copper on the London Metal Exchange up 0.5% at $9,812 per ton, and COMEX copper futures higher by the same margin at $4.5185 per pound.
Meanwhile, fresh economic data added complexity to the policy outlook. The Commerce Department reported that U.S. GDP grew 3.3% in Q2, stronger than the initial 3.0% estimate and rebounding from a 0.5% contraction in Q1.
The robust expansion highlights the resilience of the U.S. economy, though it complicates the Fed’s rate-cutting calculus. Policymakers will weigh this data alongside Friday’s release of the July PCE price index, their preferred inflation gauge, which is expected to show inflation still above the 2% target.
Gold is drawing support from rate cut bets and a softer dollar, though stronger U.S. growth clouds the outlook. Traders will watch Friday’s inflation data closely for confirmation before the Fed’s September meeting.