Gold Prices Surge as Markets Bet on Decisive Fed Rate Cut

Monetary Policy Tailwinds

The primary driver for gold this week has been the shifting sentiment regarding US monetary policy. Recent labor market data has shown signs of moderation, leading to a rise in expectations for a dovish pivot by the Federal Reserve. This has effectively weakened the US Dollar and lowered Treasury yields, enhancing the appeal of non-yielding bullion.

Central Bank and Structural Support

Beyond short-term interest rate speculation, gold is finding long-term support from central bank reserve diversification. Major emerging market institutions have continued to accumulate gold at a record pace throughout 2025, viewing it as a critical hedge against global debt levels and geopolitical instability. Analysts suggest this institutional buying provides a permanent floor for the current rally.