Gold Holds Near Record Highs as Markets Brace for Fed Rate Cut

Ashlee VogenthalerPRISM MarketView

Gold prices remained close to record territory on Friday as weak U.S. labor market data reinforced expectations that the Federal Reserve will deliver its first rate cut of the year next week. Spot gold rose 0.4% to around $3,648 per ounce, just shy of Tuesday’s all-time high of $3,674, while U.S. December futures settled near $3,686. The metal is up nearly 2% this week, its fourth consecutive weekly gain, and has rallied almost 40% year-to-date.

The surge reflects a mix of economic and policy drivers. Recent reports showed jobless claims climbing to their highest in nearly four years, payroll growth slowing sharply, and an extraordinary downward revision that cut 911,000 jobs from the prior year’s figures. While August consumer prices rose at the fastest pace in seven months, markets are giving more weight to signs of labor market weakness. Traders have fully priced in a 25-basis-point rate cut at the September 16-17 FOMC meeting, with some still betting on a larger move.

UBS this week lifted its gold forecast to $3,800 per ounce by year-end and $3,900 by mid-2026, citing dovish Fed expectations, central bank demand, and ongoing geopolitical uncertainty. Goldman Sachs has been even more bullish, suggesting gold could climb to $4,000 under its base case and as high as $5,000 if political interference in Fed policy sparks a broader reallocation of assets into bullion. Analysts note the rally has been steadier than the inflation-driven spike of 1980, supported by deeper liquidity and easier investor access through exchange-traded funds.

Other precious metals joined the rally. Silver hit a 14-year high above $42 an ounce, platinum rose to around $1,400, and palladium climbed above $1,200. Copper also advanced to a six-month high after Freeport-McMoRan suspended operations at its Grasberg mine in Indonesia.

Beyond the near term, analysts see gold’s trajectory tied to the Fed’s policy path and broader global risks. With inflation sticky, growth slowing, and geopolitical tensions simmering, gold’s role as a hedge against both stagflation and financial instability appears firmly back in focus.