Gold and Silver Set New Highs as Rate Cut Odds Grow

 

Gold and Silver Set New Highs as Rate Cut Odds Climb

(Bullion News Network) – The spot price of gold hit another all-time high on Friday, crossing $3,600 per troy ounce for the first time in history. Silver also gained to end the week, adding over $0.35 to its spot price and crossing $41/ozt for the first time in over 14 years. The price action favored gold, driving the gold-silver ratio nearly half a point higher in the metric’s fourth gain this week. More rate cut speculation drove demand for gold and silver to round out the shortened trading week. The U.S. employment report came in much worse than expected, which seems like a bullish signal for investors hoping for a rate cut at the Federal Reserve’s September meeting. Safe haven assets, including gold and silver, gained on the news, with gold setting an all-time high and silver crossing $41 per troy ounce before markets closed on Friday. 

Another weak employment report sent shockwaves throughout American markets. The August U.S. employment report released Friday morning found that payrolls only increased by 22,000, down from a median forecast of 75,000. The unemployment rate also rose to 4.3%, the highest reading since 2021. Wall Street slipped after the report was published, with the S&P 500, Nasdaq, and Dow retreating on the anemic labor report. Precious metals moved in the opposite direction. Gold and silver both gained on the news, with gold logging a fresh all-time high above $3,600 per troy ounce and silver gaining ground above $41/ozt. 

Fed rate cut futures jumped on the news. CME FedWatch now projects an 89.8% probability that the FOMC will vote to cut rates by 25 basis points at its next meeting, which is scheduled for September 17th. Notably, the model also projects a 10.2% chance that the Fed will opt for a more aggressive 50 bps cut in September. This is the first time in over a month that a 50 basis point rate cut has appeared as a realistic possibility. As Federal Reserve Chair Jerome Powell suggested last month at the annual Jackson Hole economic symposium, the FOMC’s two goals of stabilizing prices and maximizing employment may be at odds. While a rate cut seems likely given growing concerns about the U.S. labor market, cutting interest rates risks worsening inflation, which is already elevated.

Precious metals like gold and silver are commonly considered safe haven assets, as they tend to retain value or become more valuable during periods of high inflation or falling interest rates. Last year, interest rate cut speculation drove many of gold’s most significant price runs, driving the metal to several all-time highs. Rate cut speculation played a backseat role in the precious metals market for most of 2025, with geopolitical and economic uncertainty instead driving gold to record highs. With a new rate cut on the table, interest rate cut futures could more closely correlate with gold price action moving forward into the last few months of 2025. 

Gold is set to end the day at a record high just under $3,600 per troy ounce. Silver prices will settle at over $41 per troy ounce, the precious metal’s highest price since 2011. The gold-silver ratio jumped by more than 0.5 points on Friday, closing at over 87.58:1. Platinum and palladium prices moved little compared to gold and silver, with platinum gaining nearly $5 per troy ounce as palladium dropped by just over $10/ozt.