2025.08.2818:19:25UTC+00Gold Rises to 5-Week High on Softer Dollar

Gold prices surged above $3,415 per ounce on Thursday, marking a five-week peak as both a weaker dollar and increased safe-haven demand buoyed the metal. The dollar's 0.4% decline enhanced the allure of gold for international buyers, thereby boosting its demand. For over a week, prices have been on an upward trajectory due to mounting concerns that political pressures on the Federal Reserve might lead to accelerated and deeper rate cuts. Markets are currently factoring in an 87% probability of a quarter-point rate reduction in September, with focus shifting to Friday's PCE inflation report for additional insights. Further uncertainty was stirred when Fed Governor Lisa Cook initiated a lawsuit contesting President Trump's authority to dismiss her, underlining potential threats to the central bank's independence. Concurrently, although jobless claims have slightly declined, indicators of a slowing labor market and the looming possibility of rising unemployment are reinforcing expectations of a more accommodative Fed approach, which in turn is providing further support for gold.