Gold prices powered past the $4,300 mark on Friday, brushing against record levels once again as investors bet that the United States is preparing to ease borrowing costs in the months ahead.
The precious metal climbed above $4,300 per ounce, putting it on course for another winning week. For many investors, gold’s rise is simply about one thing: expectations that interest rates in the U.S. are heading down.
Fresh economic data added fuel to that belief. New jobless claims, an indicator of how many people are filing for unemployment, rose more than expected, reaching their highest level in two months. When the labour market cools, the U.S. Federal Reserve tends to worry less about inflation and becomes more open to cutting interest rates.
That is exactly what markets think will happen next year. Traders are now positioning for two interest rate cuts in 2026, even though the Fed itself has projected only one.
This comes on the heels of the Fed delivering its third rate cut this year and softening its tone about future tightening. Fed Chair Jerome Powell hinted that further rate hikes are unlikely, helping to weaken the dollar and push gold prices higher.
In addition, the Fed announced plans to buy about $40 billion worth of short-term U.S. Treasury bills. This move is designed to reduce pressure in money markets. Lower yields on these short-term government loans typically make gold, an asset that pays no interest, more attractive by comparison.
The combination of weaker labour data, a softer Fed, and lower expected yields has given gold another strong push, bringing it back into record-territory conversations.
For now, gold remains one of the standout performers of 2025, up sharply compared to last year as uncertain investors continue to search for stability in a world of shifting economic signals.
