Gold prices soared to a record-breaking $2,185.19 per ounce on Friday, fueled by a US jobs report that hinted at a potential shift in Federal Reserve policy.
The report, while showing job growth, also revealed a rise in the unemployment rate and a moderation in wage gains. This data sparked a surge in investor bets that the Fed might begin cutting interest rates sooner than anticipated.
Prior to the report, bets for a May rate cut hovered around 30%. However, these figures jumped significantly. While June remains the most likely timeframe for a cut (at 80%), the possibility of earlier action has boosted gold’s appeal.
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Gold’s recent climb began earlier this week, driven by signs of cooling inflation and its status as a safe-haven asset. Lower interest rates typically benefit gold prices as they decrease the opportunity cost of holding non-interest-bearing bullion.
Analysts anticipate this jobs report will ultimately keep the Fed on track for a June rate cut. However, gold prices are expected to continue their upward trend, with a potential brief consolidation period before further gains.
Despite reaching a record high, spot gold prices have since dipped slightly, currently trading at $2,175 per ounce.
