Gold Soars on Expectations of U.S. Interest Rate Cuts

Gold Extends Rally to Fourth Consecutive Session as Dollar Weakness Fuels Rate Cut Expectations

Gold continued its upward momentum for the fourth straight trading session on Tuesday, driven by a weakening dollar and declining U.S. Treasury yields following disappointing American jobs data that has intensified speculation about a Federal Reserve interest rate cut in September. The precious metal's sustained rally reflects growing investor confidence that monetary policy will soon shift in favor of non-yielding assets.

Market Performance and Technical Indicators

Spot gold climbed 0.1% to $3,375.89 per ounce by 0239 GMT, while U.S. gold futures similarly advanced 0.1% to $3,430.40. The dollar index hovered near its weekly low, making gold more attractive to holders of other currencies and providing additional tailwinds for the precious metal.

The benchmark 10-year Treasury yield dropped to its lowest level in a month, reducing the opportunity cost of holding non-interest-bearing gold. This yield compression signals that bond markets are pricing in a more dovish Federal Reserve stance ahead of the September policy meeting.

Broader Precious Metals Complex Benefits

The positive sentiment extended across the precious metals sector, with silver gaining 0.1% to $37.44 per ounce. Industrial metals with precious metal characteristics also participated in the rally, as platinum rose 0.1% to $1,330.31 and palladium advanced 0.2% to $1,204.25.

Federal Reserve Policy Pivot Creates Investment Opportunity

The weaker-than-expected U.S. employment data has fundamentally shifted market expectations regarding Federal Reserve policy. Investors are increasingly positioning for a scenario where the central bank will need to cut rates to support economic growth, making gold's zero-yield characteristic less of a disadvantage compared to interest-bearing assets.

This monetary policy anticipation mirrors similar patterns seen during previous easing cycles, where gold typically outperformed in the months leading up to and following initial rate cuts. The current setup suggests institutional investors are already rotating into defensive assets ahead of what many perceive as an inevitable policy shift.

Strategic Implications for Investors

Gold's four-session winning streak, combined with dollar weakness and falling yields, creates a compelling technical and fundamental backdrop for continued precious metals strength. The convergence of these factors typically signals the beginning of more sustained rallies rather than short-term fluctuations.

For portfolio managers, the current environment presents an opportunity to increase precious metals exposure before broader market recognition of the Fed's policy pivot potentially drives prices higher. The synchronized movement across gold, silver, platinum, and palladium suggests institutional demand is broadening beyond traditional safe-haven buying into strategic allocation increases.