What happened
Traders see a high chance of a September rate cut. Pricing in fed-funds futures points to strong odds for a quarter-point move. That shift lowers the expected path of yields and boosts the appeal of non-yielding assets like gold.
Why this supports gold
When the policy path turns easier the opportunity cost of holding bullion drops. A weaker dollar often comes along for the ride which improves international buying power and keeps flows pointed to metals.
What to watch
Jobs data and inflation updates can nudge those odds day by day. If the next round of data softens further markets are likely to lean even harder toward a September cut.
Client takeaway
An easier Fed path has been a key driver of this rally. If the cut lands in September gold’s support likely persists through the quarter.
