Gold Soars on Rate-Cut Hopes and Geopolitical Tensions

Gold prices have surged, with futures climbing by more than 2% last week, fueled by mounting expectations of Federal Reserve interest rate cuts. A disappointing U.S. jobs report for July, which showed a substantial slowdown in hiring, has been a "wake-up call" for the market, prompting analysts to suggest that the Fed may be leaning toward a more dovish stance. The data indicated that the U.S. added 73,000 jobs, far below forecasts, and previous months' numbers were revised down by nearly 260,000.

In the wake of this report, the probability of a rate cut by the Fed in September has risen to more than 75%. This shift in monetary policy expectations, along with increased trade tensions and global geopolitical instability, has bolstered gold’s appeal as a safe-haven asset. Gold futures (XAU/USD) reached a weekly high of $3,416 per ounce. Bullion has seen a remarkable rally, gaining more than a quarter this year. The price of 24-carat gold in India, for example, stood at ₹1,01,340 per 10 grams, while silver was priced at ₹1,12,900 per kilogram.

While gold futures showed a gain, the spot price of gold saw a slight dip in early trading, a likely technical correction after the sharp rise. However, analysts believe that the metal's upward trajectory is likely to continue, citing sustained central bank buying and institutional fund inflows as strong supporting factors. In the near term, gold is expected to trade in the range of $3,300 to $3,430, with some analysts forecasting a push toward $4,000 by mid-2026.