Gold Hits Two-Week High as Investors Anticipate Fed Rate Cuts

Web Editor

August 5, 2025

Background on Gold and Its Relevance

Gold, a precious metal long regarded as a safe-haven asset, has recently experienced a surge in its value. This upward trend is primarily driven by growing expectations of interest rate reductions in the United States, as well as investor anticipation regarding President Donald Trump’s decisions on appointments to the Federal Reserve (Fed).

Recent Market Developments

On Tuesday, the spot price of gold reached its highest point in nearly two weeks, climbing by 0.3% to $1,382.88 per ounce. The US gold futures also advanced by 0.3% to $1,437.4 per ounce.

The US dollar index slightly decreased by 0.1%, which made gold relatively cheaper for investors using other currencies.

Market Expectations and Trump’s Influence

Currently, markets are predicting two interest rate cuts from the Fed this year, following unexpectedly weak employment data in June and President Trump’s dismissal of the Bureau of Labor Statistics (BLS) chief. These factors have bolstered gold’s appeal, as it is viewed as a secure value store during uncertain times and thrives in low-interest-rate environments since it does not pay interest.

“The market is still shaky following last week’s heavy data and the Trump administration’s decision to replace the BLS chief,” said Daniel Ghali, precious metals strategist at TD Securities. “Both factors support gold’s strength and reinforce our view that the dollar is losing some of its safe-haven status.”

Impact on Other Precious Metals

In addition to gold, other precious metals have also experienced price fluctuations:

  • Spot silver increased by 1% to $17.76 per ounce, its highest level since July 30.
  • Platinum dropped by 1% to $1,315.47 per ounce.
  • Palladium declined by 1.1% to $1,193.4 per ounce.

Copper Market Dynamics

Meanwhile, copper prices fell on Tuesday due to increased inventories reported by the London Metal Exchange (LME) and concerns over Chilean supply. The benchmark copper price on the LME decreased by 0.5% to $9,641 per tonne after reaching an intraday high of $9,747.5 earlier in the session.