Gold prices advanced on Friday after Federal Reserve Chair Jerome Powell opened the door to the possibility of an interest rate cut in September, sending the US dollar and Treasury yields lower.
Speaking at the Fed’s closely watched annual Jackson Hole symposium, Powell acknowledged that while inflation concerns remain, risks to the labor market are becoming more prominent. “The stability of the unemployment rate and other labor market measures allows us to proceed carefully as we consider changes to our policy stance,” Powell said. “Nonetheless, with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance.”
The remarks were interpreted by markets as a signal that the Fed is preparing to ease policy as early as next month. Traders quickly increased bets on a September rate cut, sparking a rally in bullion. Gold rose as much as 1.1% in New York trading, reflecting its traditional role as a beneficiary of lower interest rates.
“Powell’s comments are the catalyst the market has been waiting for,” said Ewa Manthey, commodity strategist at ING Groep NV. “With US rate cut bets now intensifying, gold could be poised for another record high.” She added that the Fed chair’s tone could reignite momentum in a market that had stalled in recent months after touching all-time highs earlier this year.
The move in gold comes on top of an already strong performance for the precious metal in 2025. Expectations of lower borrowing costs, combined with robust central bank purchases and persistent geopolitical tensions, helped propel gold to a record in April. It has since traded in a narrower range, but remains up more than 28% year-to-date. Analysts at major institutions, including UBS Group AG’s wealth management unit, continue to forecast further upside for bullion.
Alongside gold’s advance, other precious metals also posted gains. Silver, platinum, and palladium all moved higher, while the Bloomberg Dollar Spot Index retreated as investors repositioned on Powell’s dovish tilt.
The broader implications of Powell’s Jackson Hole remarks extend beyond gold, as the Fed weighs the balance between fighting inflation and supporting a slowing labor market. But for now, traders are treating the shift in tone as a green light to add exposure to bullion, reinforcing gold’s reputation as one of the prime beneficiaries of a more accommodative monetary policy.
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