Gold Prices Hold Steady at $2350 After Friday's Volatility; Eyes on Potential Rate Cut Catalyst

Gold prices found support at $2350 per ounce yesterday following a selloff that erased gains from Friday. On Friday, gold reached a peak of $2393 per ounce as the market evaluated the impact of the US jobs report and adjusted expectations regarding a potential rate cut.

Weak US economic data last week led to significant downward revisions of last month’s Non-Farm Payroll (NFP) figures, prompting market participants to increase their expectations of a 25-basis point rate cut in September. The probability of this rate cut rose from 60% to 77% early in the week.

As markets contemplate their medium- and long-term directions, gold remains a focal point. Based on Friday’s market dynamics, could a rate cut serve as the catalyst for gold to surpass the $2400 per ounce threshold and sustain these levels?

Historically, gold prices tend to perform well in low interest rate environments. Given the current rate climate, it is notable that a more significant price correction has not occurred since the beginning of the year. This fosters optimism that gold could be poised to move beyond the $2400/oz mark once the Federal Reserve initiates rate cuts.