Gold Hits $2,500+ an Ounce Amid Rate‑Cut Speculation and Gaza Uncertainty
Gold stayed above $2,500 per ounce after briefly touching $2,510 early this week, although it ended down 0.15%. Even COMEX futures slipped to $2,550 last Friday.
Why the Metal is Swaying
Two main drivers are keeping a stop‑motion shape around spot prices:
- Rate‑cut optimism – Markets are buying into the idea that the Fed might cut rates multiple times this year, especially after the housing market dialed in disappointing numbers. The CME FedWatch tool predicts a total 1% cut starting in September, stepped out in 25‑basis‑point increments.
- Gaza ceasefire vibes – The lack of a concrete breakthrough in the talks could keep fears of a wider regional war alive, which tends to boost gold as a safe‑haven.
Rate‑Cut Fever
Last Friday, the mood tilted toward a boost in rate‑cut expectations after the housing data stumbled. Some investors were still dialling in a 50‑basis‑point emergency cut for September, but that seems unlikely now.
Fed signals will again weigh in on Powell’s key speech in Jackson Hole and the June FOMC minutes – both clues for whether a September cut likely will happen.
Even if the Fed sounds a bit hawkish, gold could stay solid. Inflation keeps ticking up: monthly inflation and core inflation are holding at around 3.2% year‑over‑year.
Gaza’s Tough Negotiations
Last week’s talks painted a hopeful picture, but in reality they didn’t push hard enough on critical issues – border crossings and a permanent ceasefire remain stuck. The fallout? Hamas kicked the US proposal out after it failed to address those points.
Some senior officials label the latest rounds as a “last chance,” but skepticism lingers. A Hamas official said the U.S. was over‑selling the progress, essentially buying time without halting the conflict.
According to a Georgetown scholar, the chance of success for this deal has dipped, with no real shift in how either side publicly positions itself.
TL;DR
- Gold is hovering just above $2,500 despite a slight dip.
- Investors eye Fed rate cuts for September—predicting a cumulative 1% reduction.
- Gaza negotiations absent a game‑changing breakthrough keep regional risk alive.
- Inflation remains steady, keeping gold’s safe‑haven appeal.
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