Gold rises for the third session in a row
Gold prices on Thursday recorded some rises, exceeding the barrier of 3,370 dollars per ounce, in the third consecutive session of growth, supported by growing expectations that the US Federal Reserve will cut interest rates soon.
The impact of economic data on interest expectations
The latest US Consumer Price Index report showed a decline in tariff-related inflation fears, while indicators of a slowing labor market reinforced expectations of additional monetary easing.
The markets are currently pricing in a 25 basis point cut in September of over 95%, according to FedWatch tool, with some forecasts of a possible 50 basis point larger cut.
US Treasury Secretary Scott Besant also added additional impetus to these forecasts, calling for multiple cuts in interest rates, suggesting that the Fed start cutting 50 basis points to stimulate the economy.
Geopolitical risks boost gold demand
Along with monetary factors, gold found support from geopolitical tensions, especially before the scheduled meeting between US presidents Donald Trump and Russian Vladimir Putin on Friday.
Trump warned on Wednesday evening that Russia could face very serious consequences if it does not end the Ukraine war, threatening to impose economic sanctions if talks between the two countries fail.
In the end, it seems that gold is currently benefiting from several factors, namely:
- Expectations of a reduction in US interest rates.
- Geopolitical anxiety and tensions between the United States and Russia.
- The decline in inflation and weak labor market indicators.
We expect that with the continuation of these factors, the yellow metal may maintain its bullish momentum in the coming period.
