Gold futures are up by nearly 2% on Monday, reaching a new record high of $3,773.10 per troy ounce on rising rate-cut momentum. The precious metal is now up by about 40% year-to-date, its best year since 1979, when it returned a staggering 133%, according to Carson Group.
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Goldman Sachs expects two more rate cuts this year in October and December. Gold generally benefits from lower rates because it doesn’t pay out interest. That makes it more attractive with a lower opportunity cost when compared to interest-bearing assets, like Treasury bonds.
Another Rate Cut in 2025 Seen as Near Certain
By the end of 2025, there is only a 1.6% chance of the Fed holding rates steady and a 98.4% chance of at least one more rate cut, according to CME’s FedWatch tool.
“Technicals are looking pretty strong, and expectations are rising for deeper rate cuts,” said ANZ Group commodity strategist Soni Kumari.
Other experts are more cautious, with analysts at Heraeus Precious Metals warning that the odds of gold entering a period of consolidation have risen following several weeks of strong performance.
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