The Kaipher Editorial Team 
Gold prices climbed toward a fifth consecutive weekly gain after the Federal Reserve delivered its first rate cut of 2025, though the precious metal pared back from record highs following Chair Jerome Powell’s cautious guidance on future easing (Reuters).
Price Performance
Spot gold traded at $3,650 per ounce on Friday, up 0.2% from Thursday’s close. The metal hit an all-time peak of $3,707.40 on Wednesday immediately after the Fed’s 25 basis-point reduction, reflecting strong investor demand for a hedge against uncertainty.
Despite this record high, gold retreated slightly as markets absorbed Powell’s remark that the Fed will approach further rate cuts on a “meeting-by-meeting” basis. Profit-taking ensued after the initial surge, illustrating how finely balanced the rally remains upon central bank signals (MoneyControl).
Fed Rate Cut and Commentary
On Wednesday, the Federal Reserve lowered its federal funds rate to the 4.00%–4.25% range—the first cut since December 2024. Chair Jerome Powell described the move as a “risk-management” decision in response to a weakening labor market, emphasizing the Fed’s commitment to data-dependent policy decisions rather than preset easing paths (Fox Business).
The updated projections foresee two more rate cuts by year-end and only one additional cut in 2026, falling short of the more dovish expectations held by some investors. “The Fed didn’t really deliver with the dovish guidance needed for gold to push higher,” said Kyle Rodda of Capital.com, noting that stronger-than-expected yield projections lifted the dollar and pressured gold prices.
Central Bank Demand Sustains Momentum
Strong official sector demand continues to underpin gold’s rally, with central banks projected to purchase 815–900 tonnes in 2025—marking the fourth consecutive year of hefty acquisitions. This trend reflects a strategic shift away from dollar-denominated reserves toward diversification and safe-haven assets (Yahoo Finance UK).
Gold exports from Switzerland to China surged 254% in August compared to July, indicating robust Asian appetite. In India, physical premiums reached 10-month highs as domestic investors remained undeterred by soaring prices, anticipating further gains amid global uncertainties.
Outlook
Year-to-date, gold has gained 39%, repeatedly setting new records on expectations of Fed easing, geopolitical tensions, and sustained central bank accumulation. Traders now price a 92% probability of another 25 basis-point cut at the Fed’s October meeting, which would further lower the opportunity cost of holding non-yielding bullion.
Analysts at JPMorgan forecast that gold could reach $4,000 per ounce by mid-2026, driven by ongoing institutional demand and a softer dollar environment. Should the Fed maintain its measured approach, gold’s rally may continue, albeit subject to intermittent retracements around key policy announcements.
