On Friday, gold soared to a new all-time high of nearly $3,600 per ounce. This surge was driven by new employment data from the U.S., which strengthened market expectations for the Federal Reserve to implement cuts later this month.
Spot prices jumped by 1.4% to settle at $3,597.80 per ounce, exceeding the previous high of $3,670 recorded just two days prior. Overall, precious metals have shown a 4% increase this week.
U.S. gold futures also saw a similar rise, with the most active contract eclipsing the $3,650 mark for the first time.
The record highs were confirmed by a significant employment report indicating a slowdown in job growth last month, resulting in the highest unemployment rate since 2021, reflecting sluggish conditions in the labor market of the world’s largest economy.
In light of this data, traders have nearly concluded that the Fed will announce a rate cut in their upcoming meeting on September 17, with an 84% probability of a 25 basis point reduction and a 16% chance for a 50 basis point cut.
“Gold is hitting new highs. The Bulls are observing a clear weakening trend, which likely means more cuts in employment,” noted independent metal trader Tai Wong.
This year has already seen a more than 36% increase in the price of gold. Growing geopolitical risks and concerns about the economy continue to bolster demand for safe-haven assets.
“The outlook for gold remains quite positive. I think we’re still a ways from reaching $4,000—unless something drastic happens, labor trends may mitigate short-term, maybe even medium-term inflation,” Wong added.
Fed Drama Fuel Gathering
Analysts are also raising concerns about the Fed’s independence as a significant factor in gold’s price trajectory. This issue has gained attention following U.S. President Donald Trump’s attempts to dismiss federal governor Lisa Cook and his push for rate cuts at the central bank.
Considering this, analysts at Goldman Sachs Group suggested that if Trump continues to challenge the Fed and influences its policies, gold could realistically reach $5,000.
