Gold Hits Record Highs for Third Day as Fed Rate Cut Buzz Lifts Prices
Gold prices smashed fresh records for the third straight day in Asian trading. The rally is being fueled by strong bets that the U.S. Federal Reserve will soon cut interest rates. Lower rates usually weaken the U.S. dollar, and when the dollar slips, gold shines brighter as the top safe-haven asset. Falling bond yields have also boosted gold’s appeal, making it more attractive compared to low-yielding investments.
Last week’s U.S. jobs report added more fire to the rally. The unemployment rate climbed to 4.3%, leading markets to assume the Fed might deliver a rate cut in September. Some traders are even expecting a bigger 50-basis-point move.
Apart from Fed expectations, rising global risks and political uncertainty in countries like Japan and France are adding extra support to the precious metal. However, analysts warn that gold is now in “overbought” territory, meaning a short pause or minor pullback could happen before the next big move.
All eyes are now on upcoming U.S. inflation data — the Producer Price Index and Consumer Price Index this week. These reports could decide whether gold keeps rising or takes a breather.
Impact:
Gold might climb closer to $3,700 if rate cut hopes stay strong. A surprise jump in inflation could possibly slow down or pause the rally.
