Gold extends rally as Fed rate-cut bets strengthen

Gold prices rose for a third straight day as bets increased on a U.S. Federal Reserve interest rate cut, after Treasury Secretary Scott Bessent urged the central bank to lower borrowing costs.

The precious metal traded near $3,370 an ounce after U.S. Treasury yields fell on Wednesday, following Bessent’s suggestion that the Fed’s benchmark rate should be about 1.5 percentage points lower than its current level. Lower borrowing costs and falling yields typically support gold, which does not yield interest.

Shift in monetary easing expectations

The rise in rate-cut bets marks a turnaround from last month, when markets saw less than a 50% chance of a cut in September. Now, consensus points to a quarter-point reduction next month, with some betting on a larger move.

Gold has gained 28% so far this year, with most of the rally occurring in the first four months. Prices have been buoyed by heightened geopolitical and trade tensions, as well as central bank purchases that reinforced the metal’s strength.

Spot gold climbed 0.5% to $3,372.03 an ounce at 7:25 a.m. in Singapore, after a 0.2% gain in the previous session. The Bloomberg Dollar Spot Index slipped 0.1%. Silver, platinum, and palladium prices also saw modest increases.

Markets are still awaiting official clarification on whether U.S. imports of gold bullion will face tariffs, following days of confusion that pushed the premium on New York gold futures above spot prices in London. On Monday, President Donald Trump said he would not impose tariffs on bullion, narrowing the gap between the two markets, but offered no further details.