Gold prices surged to another record high this week, with analysts forecasting continued gains as the Federal Reserve initiates a new cycle of monetary easing. December gold futures closed at $2,644.70 per ounce, marking a more than 1% daily increase and nearly 1.5% gain from last week’s historic close above $2,600 per ounce.
The latest rally comes after significant market volatility, following the Federal Reserve’s announcement of a 50-basis-point interest rate cut and plans for 200 basis points of easing over the next two years. While gold initially surged on the news, Federal Reserve Chair Jerome Powell’s remarks tempered expectations. Powell emphasized that the Fed is not rushing to lower rates and is “recalibrating” its policy to align with evolving economic conditions.
During a press conference, Powell explained the central bank’s approach: “We are adjusting our stance from where we were a year ago, given the current economic landscape. There is nothing in the [Summary of Economic Projections] indicating that we are in a hurry.”
Market experts maintain that while Powell’s comments may cool short-term enthusiasm, the overall trend for gold remains positive. Jerry Prior, COO and senior portfolio manager of the KFA Mount Lucas Managed Futures Index Strategy ETF, remarked that while gold may not experience a sharp spike, it is likely to continue a gradual upward trajectory.
Similarly, Julia Khandoshko, CEO of European brokerage Mind Money, expects gold prices to steadily rise, predicting a slow climb toward $3,000 an ounce. However, she noted that such levels may not be reached before year-end. “We are more likely to see consolidation at these levels, with gradual growth over time,” she said, adding that current conditions make gold an attractive option for diversification compared to stocks or bonds.
Analysts also caution that short-term volatility could present both risks and opportunities. Fawad Razaqzada, market analyst at StoneX Group, highlighted the possibility of a temporary price correction but reaffirmed a long-term bullish outlook. He suggested any dip in gold prices could be viewed as a strategic buying opportunity, with expectations of continued central bank rate cuts, geopolitical tensions, and growing gold purchases supporting the metal.
Patricia Mohr, an independent economist and commodity specialist, added that the Fed’s efforts to engineer a “soft landing” for the U.S. economy would likely be mirrored by other central banks, further boosting demand for gold and metals in general.
However, some analysts have flagged potential downside risks. Alex Kuptsikevich, Senior Market Analyst at FxPro, noted that while gold’s upward momentum remains strong, it could be followed by a period of consolidation or even a sharp reversal, similar to previous market cycles. “Overbought conditions in gold do not signal an immediate reversal, but traders should watch for signs of exhaustion,” he said.
Looking ahead, the broader economic landscape will play a key role in determining the metal’s trajectory. While the Federal Reserve has laid out its policy framework through mid-2026, the true direction of gold prices will depend on upcoming economic data. Jerry Prior warned that any significant downturn in equity markets could trigger a sell-off in gold, as investors might liquidate assets to cover losses elsewhere.
Next week, markets will be closely watching economic reports, including preliminary manufacturing data, housing sales figures, and consumer confidence. However, the most anticipated release will be the core Personal Consumption Expenditures (PCE) index for August, which serves as the Federal Reserve’s preferred measure of inflation.
As uncertainty remains, investors continue to monitor gold’s performance as a safe-haven asset in an evolving financial landscape.
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