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Gold Prices Stay Strong Above $3,500 — Up 44% Year-on-Year
Gold prices continued their impressive run on Friday, with futures opening at $3,602 per ounce, up 1% from Thursday’s close of $3,565.80. The precious metal has now held above $3,500 since September 2, supported by growing expectations that the Federal Reserve will move to cut interest rates later this month.
Fed Rate Cut Bets Near Certainty
Market sentiment has shifted dramatically in recent weeks as investors price in a near-certain rate reduction. According to CME FedWatch, there is now a 97.6% probability that the Fed will lower the federal funds rate by 25 basis points this month. That’s a notable jump from the 86.4% probability recorded on August 29.
The latest weekly jobless claims report, released Thursday, added weight to the case for easier monetary policy. Initial claims rose by 8,000 to 237,000, while the four-week moving average climbed to 231,000 from 228,500. Investors are now waiting for the August unemployment report, due later today, for more clarity on the labor market outlook.
Why Lower Rates Boost Gold
The anticipation of lower interest rates is good news not only for stocks but also for gold prices. When rates fall, non-yielding assets like gold become more attractive compared to interest-bearing alternatives such as bonds or cash. With borrowing costs potentially easing, gold’s appeal as a store of value and inflation hedge strengthens.
Gold’s Performance Over Time
Friday’s opening price of $3,602 marks a 4.9% increase from the opening price of $3,432.50 just one week earlier on August 29. Over the past month, gold futures are up 6.6%, compared to the August 5 opening price of $3,378.50.
The longer-term picture looks even more striking. Over the past year, gold has surged 44.4%, rising from $2,493.70 on September 5, 2024, to today’s level. This remarkable performance underscores gold’s resilience and its role as one of the year’s standout assets.
Costco’s Precious Metals: Gold With Your Groceries
Adding a unique twist to gold’s story, Costco (COST) has emerged as a surprising source for precious metals. Alongside its famous rotisserie chicken, the retail giant now offers gold bars, silver coins, and platinum bars.
Costco first introduced gold bars in 2023, later expanding its offerings to include silver (SI=F) and platinum. The move has proven popular, especially as gold trades near all-time highs. Many investors view these metals as a way to diversify wealth beyond traditional assets.
With gold, silver, and platinum all showing significant gains in 2025, Costco’s entry into precious metals has captured attention not only from bargain hunters but also from serious investors seeking easy access to physical assets.
Gold’s Cyclical History
While gold is enjoying a strong bull phase now, its history is marked by cycles of boom and stagnation. From 2009 to 2011, the metal experienced a powerful growth phase before entering a prolonged nine-year slump where it failed to set new highs.
For investors, this cyclical nature is both a challenge and an opportunity. During down cycles, gold can weigh on overall portfolio returns. Those unwilling to accept years of underperformance may prefer a smaller allocation, while others may ride out the declines in hopes of capturing outsized gains during bull runs.
Analysts Turn Bullish on 2025 Outlook
The strong momentum in 2025 has drawn bullish forecasts from major institutions. In May, Goldman Sachs Research projected that gold would reach $3,700 per troy ounce by year-end 2025. Based on gold’s opening price of $2,633 on January 2, this would mark a 40% gain for the year.
Two primary forces are fueling this optimism: rising demand from central banks and persistent uncertainty surrounding U.S. tariff policy. Together, these factors have positioned gold as one of the most closely watched assets in global markets.
Outlook: All Eyes on the Fed
As the market awaits the Fed’s next move, gold remains firmly supported above $3,500, with technical strength and macroeconomic tailwinds aligned in its favor. If the Fed follows through with a rate cut, gold could see another leg higher, bringing analysts’ ambitious targets closer into view.
For now, the precious metal continues its steady climb, capturing headlines, attracting retail interest through outlets like Costco, and maintaining its reputation as a reliable safe haven in uncertain times.
