Gold’s Monumental Rally Continues: New Records Set as $4,000 Target Comes into Focus

Gold prices are not just advancing—they are soaring to new heights, hitting $3,778.85 per ounce and solidifying a massive multi-month rally. This surge is powered by intense speculation that the Federal Reserve will continue to cut interest rates, a bet reinforced by the latest inflation data and signals of a softening job market. The metal is now up 0.78% on the day and has demonstrated phenomenal strength across.

Dovish Fed Bets Fuel the Fire

The key driver remains the expectation of sustained monetary easing. The core Personal Consumption Expenditures (PCE) Price Index—the Fed’s preferred inflation gauge—held below the 3% threshold, which market participants view as giving the central bank room to be more accommodative. The CME FedWatch Tool indicates a high probability for a rate cut in October and a strong chance for another cut in December, translating directly into a bullish environment for non-yielding gold.

Adding to the complexity are mixed economic signals: consumer sentiment has recently fallen due to worries about high prices and the labor market, and some central bank officials have noted a “more fragile” jobs picture. These factors collectively push the narrative toward a dovish Fed, despite a slight uptick in US Treasury yields. The upcoming week’s data, including Nonfarm Payrolls (NFPs) and ISM PMI, will be crucial tests for this policy outlook, based upon encouraging fundamental factors like persistent central bank buying and growing geopolitical uncertainty.

The current price action, which saw gold bounce strongly off its daily low of $3,734.44 to hit a high near $3,783.88, suggests that buying on dips remains the dominant strategy. As long as the market anticipates lower interest rates and the US dollar remains under pressure, gold’s path of least resistance appears to be higher.