By Daniel Takieddine, Co-founder and CEO, Sky Links Capital Group
Gold prices were close to record territory on Wednesday, as expectations of Federal Reserve easing and renewed geopolitical strains underpinned safe-haven demand. The metal remains supported by last week’s weak payrolls data and Tuesday’s benchmark revision showing US job growth was markedly slower than previously estimated.
Markets are now fully pricing in a 25-basis-point rate cut at next week’s Fed meeting, with a small probability of a 50-basis-point move. The string of disappointing labour market indicators has strengthened bets on multiple cuts through year-end, increasing the appeal of non-yielding assets. Investors will turn to inflation data later this week for confirmation of the dovish outlook.
Geopolitical risks added fresh momentum to the gold market. Increased tensions in the Middle East are threatening ongoing ceasefire negotiations. Meanwhile, incursions in the Polish airspace raised fears of broader escalation.
On the trade front, uncertainty persists after President Trump urged the European Union to impose tariffs of up to 100% on China and India as part of efforts to pressure Russia over the war in Ukraine. The heightened policy unpredictability has reinforced gold’s demand.