Gold climbed for a second straight session, closing near $3,355 an ounce as fading U.S. economic strength boosted bets the Federal Reserve will cut rates in September.
A weaker dollar and sliding Treasury yields lifted the metal, with traders increasingly viewing it as a shelter ahead of expected policy easing.
Fresh U.S. data fueled the shift. July’s headline inflation eased to 0.2% monthly, down from June’s 0.3%. But core prices—stripping out food and energy—stayed firm at 0.3%.
More strikingly, the labor market showed cracks: May-June job gains were revised down sharply from 291,000 to just 33,000. “These aren’t adjustments—they’re alarm bells,” said one London-based analyst.
Markets now price a 90% chance of a September rate cut, up from 57% a month ago. That’s hammered the dollar, making gold cheaper for global buyers. Still, the rally remains tentative. Geopolitical tensions—gold’s classic catalyst—have eased lately.
The U.S. and China extended a tariff truce, while Friday’s Trump-Putin talks on Ukraine could further dent safe-haven demand if progress emerges.
“If they agree even loosely on a ceasefire framework, gold loses its shine fast,” warned a Singapore trader. “But if talks implode? That $3,400 ceiling breaks.”
For now, gold treads cautiously. Its near-term path hinges on the dollar’s moves, bond yields, and whether the Fed’s pivot can outweigh calmer geopolitical winds.
