Gold Price News: Gold Jumps Again as US Dollar Weakens

Gold prices powered up to new all-time highs on Friday, driven by a weaker US dollar and bullish sentiment linked to expected interest rate cuts.

Prices pushed up as high as $2,585 an ounce on Friday, the highest ever recorded, and building on the previous day’s gains. That compared with around $2,560 an ounce in late trades on Thursday.

The US dollar fell against other major currencies on Thursday and Friday, supporting gold, as a weaker dollar makes the yellow metal cheaper for buyers in other currencies, boosting demand.

The effect of currency movements came against a context of a loosening of monetary policy after the ECB on Thursday cut interest rates for the second time in three months. The US Fed is expected to follow suit at a meeting scheduled for September 18, with expectations mixed over whether the bank will cut rates by 25 or 50 basis points.

Based on data from interest rate traders, the market’s expectations have shifted to a roughly 50-50% probability between a 25 or 50 basis point cut, compared with only a 30% chance of a larger cut just a few days ago.

Looking ahead, Monday is looking light on data releases and the markets will be focused on Tuesday’s US industrial production and retail sales figures for clues on the state of the economy. Also of interest will be a speech by US Fed officials on Tuesday ahead of Wednesday’s interest rate decision.