Gold prices rose to approximately $3,370 per ounce on Thursday, marking the third consecutive day of gains. This upward trend is attributed to traders increasingly placing bets on the Federal Reserve resuming interest rate cuts. The recent US Consumer Price Index (CPI) report has alleviated fears of inflation driven by tariffs, while indications of a slowing labor market have opened the door for further monetary easing. The market is nearly unanimous in expecting a 25 basis point rate cut in September, with some speculators anticipating a more substantial 50 basis point reduction. Treasury Secretary Scott Bessent has advocated for multiple cuts, recommending the Fed commence with a half-point decrease.
Aside from expectations around interest rates, gold also drew strength from geopolitical tensions in anticipation of Friday's meeting between US President Donald Trump and Russian President Vladimir Putin. On Wednesday evening, President Trump issued a stern warning that Russia would face "very severe consequences" if Putin does not end the conflict in Ukraine. While Trump did not disclose specific actions, he has previously mentioned the possibility of economic sanctions if the discussions in Alaska fail to yield progress.
