Gold Price News: Gold Benefitting From Prospect of No More Fed Hikes

Gold continues to trade near its highest level in a month after Friday’s US unemployment data showed an unexpected increase, increasing the likelihood of the Federal Reserve holding off on further interest rate hikes. 

On a trading day that is likely to be much more subdued with the US celebrating Labor Day, gold looks set to rise alongside equities. While more often gold and equities have an inverse correlation, both are benefiting from the prospect of the Fed’s aggressive policy to curb stubbornly high inflation is finally drawing to a close. 

Gold’s scope for considerably higher gains will ultimately be limited by the amount of confidence that flows into markets over the coming weeks and months and investors’ risk appetite. For the bulk of 2023, investor confidence has been very fragile with gold, as the ultimate safe haven asset, the primary beneficiary. 

If this trend starts to unwind in the final part of the year with investors more willing to back equities, then gold’s appeal will be more muted, making a fresh challenge of $2,000 an ounce less likely.