Gold prices hover near record peaks; Fed rate cut bets mount

Investing.com-- Gold prices rose Wednesday, holding just below record highs reached in the previous session, as firm expectations of a Federal Reserve rate cut next week boosted demand.

At 05:15 ET (09:15 GMT), spot gold rose 0.6% to $3,646.10 per ounce, after hitting an all-time peak of $3,674.09/oz on Tuesday, and gold futures for December were up 0.1% to $3,683.60/oz after hitting record levels above $3,700 in the prior session.

Year-to-date, gold has surged nearly 40% driven by safe-haven demand due to President Donald Trump’s trade policies and robust central bank demand.

Fed cut bets cemented after U.S. jobs revision

U.S. labor statistics revealed that the economy had created 911,000 fewer jobs over the past year than previously estimated -- a sign of softening payroll growth and a cooling labor market. 

This further added to expectations for a 25-basis-point Fed rate cut next week, with a small chance of a 50-basis-point reduction. 

Lower rates boost gold and metals by reducing the appeal of yield-bearing bonds.

“Monetary policy expectations are now likely to become the primary driver for gold’s direction,” ING analysts said in a recent note.

ANZ analysts raised their year-end gold price forecast to $3,800 an ounce from $3,600. The bank now projects bullion will peak near $4,000 by June 2026.

“Macroeconomic challenges and tension arising from tariffs and sanctions are encouraging investors to hedge risks by allocating more funds to gold,” ANZ analysts wrote.

Silver upbeat near 14-yr high; China CPI in focus

Other precious metals were also upbeat on Wednesday, with Platinum Futures rising 1.5% to $1,392.00/oz. 

Silver Futures jumped nearly 1% to $41.718 an ounce, remaining near last week’s highest level not seen since August 2011.

“Silver is also gaining traction, as investors increase their exposure to gold through silver investments,” ANZ analysts added.

Benchmark Copper Futures on the London Metal Exchange traded unchanged at $9,928.60 a ton, while U.S. Copper Futures slipped 0.1% to $4.5663 a pound.

Data from China showed that deflationary measures continued to pressure the world’s second-largest economy.

China’s consumer prices fell more than expected in August, as government stimulus failed to counter entrenched deflation, while producer prices extended their decline for a 35th straight month.

Aysuhman Ojha contributed to this article