Gold Prices Soar as Fed Rate-Hike Bets Fade

Gold prices have rebounded significantly in recent weeks, rising by over 11% in just one month. According to data from Investing.com, December gold futures closed at $4,465.42 an ounce on August 12th, up 0.55% from the previous session.

This marks a major turnaround for the precious metal, which had been declining sharply since its record highs earlier this year. Gold prices had fallen to $3,990 in late June, down around 25% from their peak, and had hovered around $4,000 through early August without setting a clear direction.

However, recent data on U.S. employment and inflation has shifted the tone in favor of gold. The latest nonfarm payrolls figures showed a decline of 23,000 jobs in July, which is weaker than expected, and inflationary pressure appears to be easing, with the consumer price index rising 3.4% from a year earlier.

As a result, the probability of further Fed rate increases has decreased, and central-bank demand for gold is also cited as a support for prices. The Bank of Korea has recently begun expanding its gold-related exposure again, buying gold ETFs in the second quarter.