Gold is glittering brighter than ever, with prices climbing on Thursday amid mounting evidence that the Federal Reserve might soon slash interest rates.
According to Seeking Alpha, driven by disappointing U.S. economic indicators and new trade policies from President Trump, gold futures notched their fourth gain in five sessions, reflecting investor optimism for a more accommodative monetary stance.
This rally didn’t emerge from nowhere. Gold futures resumed their upward climb on Thursday after a brief pause, with front-month Comex gold for August delivery settling 0.6% higher at $3,400.30 per ounce—the best close since July 22.
Silver, too, joined the party, with front-month August Comex silver ending 1% higher at $38.158 per ounce, marking its fifth consecutive gain and highest settlement since July 25.
The catalyst? U.S. jobless claims spiked more than expected this week, hitting a one-month high and signaling potential cracks in the labor market.
Last week’s weaker payrolls data only added fuel to the fire, amplifying bets that the Fed will have to act decisively to prop up the economy.
Meanwhile, President Trump rolled out "higher tariffs" on imports from several countries, a move that took effect recently and could further strain economic growth.
These trade barriers often stoke inflation fears, but in this case, they’re also feeding into expectations of Fed intervention to offset any slowdown.
Markets are now pricing in a staggering 91% chance of a 25-basis-point rate cut at the September meeting, per CME Group’s FedWatch Tool—a clear sign investors are banking on relief.
Adding another layer, Trump announced Stephen Miran, Chairman of the Council of Economic Advisers, as his choice to fill a new Federal Reserve opening.
This follows Fed Governor Adriana Kugler’s resignation last week, creating a vacancy for a policymaker who might align with Trump’s preference for lower interest rates.
For liberty-minded investors, this raises questions about whether the Fed’s independence is at risk—or if it’s a necessary push against overzealous monetary tightening.
Let’s not forget the basics: gold typically shines in a lower interest rate environment. When rates drop, the opportunity cost of holding non-yielding assets like gold diminishes, making it a go-to for wealth preservation.
So, what’s the play here for financially curious readers? If the Fed does cut rates as expected, gold could continue its ascent—consider allocating a portion of your portfolio to precious metals as a hedge against fiat currency risks, but don’t overcommit in this volatile market.