Gold – Will the Fed Lower Rates?

Commentary for Friday, Aug 8, 2025 – Today gold closed up $38.80 at $3439.10, and silver closed up $0.26 at $38.42. Gold finished the week with a bang as traders broke through significant overhead resistance this morning at $3400.00. A surprising pop to the upside helped by an overall positive technical picture, and the expected FOMC lowering of interest rates a small amount at their next meeting (September 16th and 17th). There are many moving parts to this pricing picture but even if the Fed does not lower rates, it suggests gold will hold a narrow range, at the higher end of its recent pricing structure at least for the short term. Last Friday gold closed at $3343.70 / silver at $36.79. On the week gold was higher by $95.40, and silver was higher by $1.63.

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On Monday the price of gold moved higher as traders and investors speculate that the Fed will cut interest rates in September. As of this writing, the price of gold was higher by $30.00, joining the momentum players from last Friday which saw gold close higher by more than $50.00. So bullish sentiment has gotten another shot in the arm and continues to improve. I would not, however, bet the farm on further interest rate cuts because a lot can happen between now and September 17th. But this coming FOMC meeting is described as “a meeting associated with Summary of Economic Projections”. Which will likely give everyone more insight into what the Fed has in mind between now and the end of this year. Still, the stage may be set for lower interest rates according to the oddsmakers which may lead to higher gold prices sooner than later. Citibank also joined the party – today it raised its gold forecast back to $3500.00.

Reuters (Sarah Qureshi) – Gold extends gains on US rate cut expectations – “Gold prices rose for a third straight session on Monday after last week’s economic data fueled expectations of interest rate cuts by the U.S. Federal Reserve. Spot gold rose 0.3% to $3,373.22 per ounce as of 0915 a.m. ET (13:15 GMT), its highest level since July 24. U.S. gold futures gained 0.8% to $3,427.10. “The odds are stronger now for a rate cut in September and even stronger for another rate cut in December. That coupled with the headwinds of inflation, I think is pretty bullish for gold,” said Daniel Pavilonis, senior market strategist at RJO Futures. Last week, data showed that U.S. employment growth was weaker than expected in July while the nonfarm payrolls count for the prior two months was revised down by a massive 258,000 jobs, suggesting a sharp deterioration in labor market conditions. Additionally, the Fed’s preferred gauge, U.S. PCE inflation data, increased 0.3% in June after an upwardly revised 0.2% gain in May as tariffs started raising the cost of some goods. According to the CME FedWatch tool, traders now see an 85% chance of a September rate cut, up from just over 63% a week ago. Bullion typically performs well in a low-interest-rate environment and is regarded as a hedge against inflation. The tariffs U.S. President Donald Trump imposed last week on scores of countries are likely to stay in place rather than be cut as part of continuing negotiations, Trade Representative Jamieson Greer said in comments aired on Sunday. Trump set rates including a 35% duty on many goods from Canada, 50% for Brazil, 25% for India, 20% for Taiwan and 39% for Switzerland, according to a presidential executive order. Elsewhere, spot silver was up 0.8% at $37.33 per ounce. Platinum inched 0.5% higher to $1,322.03, while palladium reached an over two-week low, slipping 1.9% to $1,184.75. Palladium prices still has some upside and are likely to see a rebound with downside support at $1,180/oz and upside breakout at $1,230, Pavilonis said.

On the day gold closed up $26.70 at $3374.40, and silver closed up $0.40 at $37.19.

On Tuesday the price of gold dipped in early trade, falling to $3350.00 reacting to a stronger dollar. But traders eagerly bought this weakness and gold bounced to daily highs around $3382.00, which might suggest traders are more optimistic about higher prices in gold in the shorter term. Whether today’s optimism is justified will depend on whether the Fed begins to cut interest rates at it next meeting on September 16th and 17th. I tend to be less optimistic about this much talked about turn to the dovish side, but the patient investor might yet be well rewarded.

Reuters (Sarah Qureshi) – Gold steadies as firm dollar offsets rate cut bets – “Gold prices held steady on Tuesday as a firmer dollar countered support from U.S. rate cut bets, while market participants awaited President Trump’s announcement on new Federal Reserve appointments. Spot gold was up 0.1% at $3,376.80 per ounce, by 0947 a.m. ET (1347 GMT) after rising to its highest level since July 24 on Monday. U.S. gold futures also rose 0.1% at $3,430. The dollar was up 0.2%, making greenback-priced gold more expensive for overseas buyers. A stronger dollar is pressuring gold right now, but expectations that the Fed will start cutting rates in September remain very supportive for gold, said Bob Haberkorn, senior market strategist at RJO Futures. Markets are currently pricing in two rate cuts by year-end, beginning in September after Friday’s unexpectedly weak June hiring data. Gold is used as a safe store of value during political and financial uncertainty and thrives in a low-interest-rate environment as it yields no interest. Meanwhile, Trump said he would announce decisions soon on a short-term replacement for Federal Reserve Governor Adriana Kugler, who announced her resignation on Friday, as well as his pick for the next Fed chair. Data showed that the U.S. trade deficit narrowed in June on a sharp drop in consumer goods imports, the latest evidence of the imprint on global commerce Trump is making with sweeping tariffs on imported goods. Investors now await Thursday’s U.S. jobs data for more clues into the Fed’s potential rate path. Spot silver rose 0.4% to $37.53 per ounce, reaching its highest level since July 30. “I’m more bullish on silver than gold right now. I think silver could break above $40, and if it does, the next target would likely be around $42,” Haberkorn said. Platinum lost 1.3% to $1,312.42 and palladium shed 1.7% to $1,186.18.”

On the day gold closed up $7.50 at $3381.90, and silver closed up $0.50 at $37.69.

On Wednesday the price of gold was fairly quiet trading between $3376.00 and $3358.00 – as traders paused to refocus after gold topped two week highs yesterday. Pricing remains elevated for two good reasons. First, according to CME FedWatch the chance of the FOMC lowering interest rates is now 87%, a bullish plus, if insider speculation is correct. Second, Trump is beating his tariff drum again which may raise safe haven demand for gold and silver bullion.

Reuters (Sarah Qureshi) – Gold falls on profit-taking; eyes on Trump’s Fed picks – “Gold prices fell on Wednesday as investors booked profits after prices hit a near two-week high in the previous session, while the market’s focus shifted to U.S. President Donald Trump’s upcoming Federal Reserve nominations. Spot gold eased 0.3% at $3,371.31 per ounce by 0956 a.m. ET (1356 GMT). U.S. gold futures fell 0.2% to $3,427.10. “We view this as a bit of a pullback… a little profit-taking from the recent move higher in the midst of a quieter time on the economic front, and a little lesser need for that safe-haven demand,” said David Meger, director of metals trading at High Ridge Futures. Gold logged gains for three consecutive sessions after weaker-than-expected U.S. employment growth data on Friday. Market participants now see an over 87% chance of a September rate cut, up from 63% earlier, as per CME FedWatch. Gold tends to perform well during economic uncertainty and a low-interest environment further supports the non-yielding asset. Trump said on Tuesday he will name a Fed Board nominee by the end of the week and has narrowed options to replace Chair Jerome Powell. Elsewhere, spot silver added 0.1% to $37.86 per ounce. Meanwhile, platinum edged up 1% to $1,334.05 and palladium dropped 2.2% to $1,147, reaching its lowest level since July 11. “The concern about sanctions on Russia has been one of the factors that had supported platinum and palladium over the last several weeks. So, the prospects for decreased tensions between the U.S. and Russia most certainly has allowed for prices to come down in recent sessions,” Meger said. Russia is a major supplier of palladium and platinum. U.S. envoy Steve Witkoff held “useful and constructive” talks with Russian President Vladimir Putin, a Kremlin aide said, two days before the expiry of a deadline set by Trump for Russia to agree to peace in Ukraine or face new sanctions.”

On the day gold closed down $1.90 at $3380.00, and silver closed up $0.08 at $37.77.

On Thursday the price of gold continues to look for conviction – one way or the other in a basically sideways market. The insiders are still buying this market on serious dips to the downside, but the bulls are struggling with tough overhead resistance, which will likely stay in place until the Fed commits itself to the general direction of interest rates in the longer term. This formula has been in place for some time now – higher interest rates are bad news and for the most part block higher gold prices, especially in the physical market. Lower interest rates are good news for bullish sentiment and generally lead to higher gold prices in the short term.

FXEmpire (Christoher Lewis) – Gold Continues to See Overhead Ceiling – “The gold market continues to see a lot of noise, but at this point in time, the $3500 level above is still a massive problem for the buyers. Buying dips continues to see a lot of interest, and at this point in time, the market isn’t one I want to short anytime soon. Technical Analysis – The gold market has found itself to be rather positive in the early hours here on Thursday, but it continues to see quite a bit of resistance above. And as a result, I think you have to look at this through the prism of a market that is going to be very noisy and very choppy as we get close to the $3,500 level. If we can break above that level, then gold could have a $300 measured move. I certainly don’t like shorting gold at this point, but I also recognize that gold is going to be one of these situations where we have to look at it as a buy on the dip scenario. If we do in fact get a little bit of a dip, I would anticipate support near the $3,400 level as well as the 50-day EMA. Over time, I do think that eventually the pressure becomes too much, and the sellers get overrun, but we are in the middle of summer, and a lot of times the volume just isn’t there. And in fact, if you look at the volume study on the chart, you can see that we peaked somewhere in the middle of April and have just simply drifted lower since then. As we get closer to September and perhaps even as late as the middle of September, we’ll start to see momentum and volume pick back up. In the meantime, I look at this as buying on the dip as the way that we go forward. I have no interest in shorting, despite the fact that I can seriously make an argument that we could pull back from here. Silver Continues to Grind Higher – The silver market continues to grind higher overall during the Thursday session, as we are well above the crucial $37.50 level. At this point, I still think this market could end up going to the $40 level, which will probably attract a lot of attention from traders as well. Technical Analysis – The silver market has rallied quite nicely during the trading session in the early hours of Thursday as we continue to see a lot of noise. All things being equal, this is a market that I think will probably see a lot of volatility, that’s typical for silver, And the fact that we are well above the $37.50 level is a good sign as it could have us looking towards the crucial $40 level again. The $40 level, of course, is a large round psychologically significant figure and an area that I think people will stand up and pay attention to once we get there. If we do pull back, I believe that the $37.50 level offers support. A breakdown below there then has the 50 day EMA being targeted as support as well. Ultimately, silver does fairly well when the U.S. dollar starts to fall, and we have seen a lot of selling of the U.S. dollar. Furthermore, gold looks like it’s doing everything it can to try to break out to the upside. And if that were to happen, it probably drags silver along with it. After all, the two do tend to move in the same direction over the longer term. Ultimately, I would look at pullbacks as nice buying opportunities, but keep in mind that silver is a very volatile and dangerous contract at times. So, make sure that your position size isn’t too strong. In that environment, you could have a situation where you can take big losses quickly if we do get another massive sell off, for example. Nonetheless, silver is something that I like, and I do believe that the industrial demand is only going to pick up longer term. So, I think we will continue to reach that crucial $40 level.”

On the day gold closed up $20.30 at $3400.30, and silver closed up $0.39 at $38.16.

On Friday the price of gold soared while CNBC discussed the possibility that Trump tariffs will now be used against bullion kilo bars (which have always been dealer reportable when investors sell). I’m not sure what to make of this latest wrinkle in the still developing tariff game. Tariffs are inflationary in the longer term. But professionals are perplexed over possible outcomes because Trump is subject to change his mind in mid-stream if he believes sovereign nations are not playing ball, at least according to his rules. I remain however optimistic as this “tariff thing” may turn out to be a tempest in a teapot, because thankfully investors have many bullion choices which happily have no government reporting requirements.

Reuters (Sherin Elzabeth Varghese) – Gold futures climb to fresh record after report of US tariff move – “U.S. gold futures surged to a record on Friday after a report that Washington has imposed tariffs on imports of 1-kg bullion bars, widening the spread between New York futures and spot prices. December U.S. gold futures were up 0.7% to $3,476.70, after hitting a record $3,534.10. Spot gold was down 0.3% at $3,386.63 per ounce as of 1151 GMT. Bullion is on track for a second straight weekly gain, up 0.7% so far this week. The futures-spot spread widened to more than $100 after the Financial Times reported that the United States had imposed tariffs on imports of 1-kg gold bars, citing a July 31 Customs and Border Protection letter. The letter said 1-kg and 100-ounce gold bars should be classified under a customs code subject to higher duties. “Given the volatility of U.S. trade-related decision-making, it is difficult to make longer-term predictions, but assuming a scenario in which tariffs remain in place … one would expect spot prices to be affected and to rise, narrowing the spread relative to the futures,” said Ricardo Evangelista, senior analyst at ActivTrades. Switzerland is the world’s largest gold refining hub and the major exporter to the United States. U.S. President Donald Trump’s higher tariffs on imports from dozens of countries kicked in on Thursday, leaving major trade partners such as Switzerland, Brazil and India hurriedly searching for a better deal. “All developments … for now solidify the London spot price as the most reliable source telling us what the real value of gold is,” said Saxo Bank’s head of commodity strategy, Ole Hansen. “Spot prices remain stuck in a range since April, with a break above $3,450 needed to change that.” Gold, a traditional safe-haven asset, is also drawing support from expectations that the Federal Reserve will cut interest rates next month. Weaker U.S. payroll data last week pushed CME Group’s FedWatch Tool, opens new tab to price in an 89% chance of a 25-basis-point cut in September. Elsewhere, spot silver was steady $38.31 per ounce, platinum fell 0.5% at $1,326.91 and palladium was down 2.3% at $1,124.93.”

On the day gold closed up $38.80 at $3439.10, and silver closed up $0.26 at $38.42.

Platinum closed down $14.30 at $1325.60, and palladium closed down $27.70 at $1133.20.

Jim Wycoff (Kitco) – “Technically, December gold futures bulls have the solid overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at the contract high of $3,585.80. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at the July low of $3,319.20. First resistance is seen at $3,500.00 and then at today’s high of $3,534.10. First support is seen at $3,450.00 and then at $3,430.00. September silver futures bulls have the solid overall near-term technical advantage and have regained momentum. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the July high of $39.91. The next downside price objective for the bears is closing prices below solid support at the July low of $36.28. First resistance is seen at the overnight high of $38.875 and then at $39.00. Next support is seen at $38.00 and then at $37.50.”

Brothers and Sisters, thank you for your friendship. If you have unusual circumstances, need cash or a special favor – talk to Harry or Eric or Ken Slater. We are now back to our traditional business model. Thank you for your patience. Blessings. Richard Schwary

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