Gold hits highs as Fed rate cut expectations grow

The global economic climate is creating a cocktail that is taking gold futures trading to a level never before seen.

The weaker-than-expected macro data in the US suggests the Fed will cut interest rates soon, while the tariffs announced Wednesday by Donald Trump threaten a number of companies. Consequently, futures for that mineral reached an all-time high on Thursday morning.

The tariffs imposed by the US administration have left strong marks on the markets over the past few months, as advances and retreats have shaken investor sentiment.

The most recent examples were the announcements of a 100% tariff on imported semiconductor chips , as well as an additional 25% tariff on imports from India to the US . These factors are compounded by the notion that the US economy is cooling, making it increasingly likely that the Fed will ease monetary policy.

The macro data released this week, regarding the ISM Services Index, fell short of expectations. Demand fell and costs rose (both variations contrary to expectations), leading to stagnation in the tertiary sector and a slowdown in the US economy.

Therefore, fears are growing and, as is common at this time, investors are flocking to gold, as this mineral is seen as a store of value, with demand increasing during periods of economic hardship and, especially, during recessions of this kind.