Gold extended its longest winning streak since February, rising more than 3% over four sessions as concerns about the U.S. economy grew. A string of weak data from the services sector, the labor market, and consumer spending has heightened recession fears, with many analysts pointing to ongoing tariffs as a contributing factor to the slowdown.
Those economic signals have increased market expectations that the Federal Reserve will begin cutting interest rates at its September meeting. Traders now price a roughly 90% chance of a rate cut. Because gold does not pay interest, lower rates often boost demand for the metal by reducing the opportunity cost of holding it and by supporting its role as an inflation hedge and store of value.
Year to date, gold has climbed nearly 30% as investors seek safe-haven assets amid trade disputes, geopolitical tensions, and diminished confidence in the U.S. dollar. Despite the strong gains, bullion remains below its April peak near $3,500, trading around $3,383 in early Asian hours.
Market participants are watching upcoming economic releases and central bank commentary closely for further clues about the timing and scale of potential policy easing. Any signals that the economic slowdown is broadening or that inflation pressures are easing could reinforce expectations for rate cuts and provide additional support for precious metals.
At the same time, traders caution that short-term price swings may continue as investors weigh conflicting indicators: resilient pockets of consumer demand versus signs of cooling activity in services and hiring. Geopolitical developments and trade negotiations will also remain key variables capable of driving volatility in gold and other safe-haven assets.
For now, the combination of softer U.S. data, elevated odds of Fed easing, and ongoing global uncertainty has created a favorable backdrop for gold, underpinning its recent rally while keeping attention focused on whether the metal can reclaim previous highs.