Gold’s Calm Before the Storm in the Fed’s Policy Arena
Traders brace for key Fed signals as gold holds near $3,357 an ounce amid rate-cut speculation.

Gold prices held their ground on Thursday as traders recalibrated their expectations for the Federal Reserve’s next move, driven by renewed pressure from US Treasury Secretary Scott Bessent to slash borrowing costs. After briefly climbing 0.6% to flirt with fresh highs, bullion settled near $3,357 an ounce, signaling a pause in the rally that has defined much of this year’s trading.
Fed Signals and Market Repricing
The shift in sentiment was sparked by Bessent’s suggestion that the Fed’s benchmark rate should be lowered by at least 1.5 percentage points from current levels. Such a cut would mark a sharp pivot in monetary policy, easing financial conditions and potentially fueling further gains in non-yielding assets like gold. The comments pushed Treasury yields lower, offering fresh support for bullion after a modest uptick in the previous session.
Market odds for a September rate cut have surged in recent days, moving from below 50% just a month ago to a firm consensus for a quarter-point move. Some traders are even positioning for a bolder half-point reduction, a bet that will be tested by incoming economic data, starting with US producer price figures later today. Any sign that inflationary pressures are cooling could strengthen the case for aggressive easing.
