Gold bounces 1.2% as weak US data fuels rate-cut bets

Gold rebounded on July 28 after the release of weaker-than-expected US economic data, with the precious metal recouping earlier losses as traders increased bets on Federal Reserve rate cuts.

"Gold is finding support from the macro side — weaker data raises the probability of a Fed pivot, which is historically bullish for the metal," said Ole Hansen, head of commodity strategy at Saxo Bank.

The US data released during the New York session showed a softening in economic activity, with key indicators missing consensus estimates. The weaker print dragged the dollar lower and pushed Treasury yields down, two factors that typically boost gold's appeal as an alternative asset. The Bloomberg Dollar Spot Index fell 0.3% on the session, while the two-year Treasury yield dropped 6 basis points to 3.84%.

COMEX gold futures settled at $2,418.30 per ounce, up 1.2% from the prior close, after trading as low as $2,385.20 earlier in the session. Spot gold tracked the move, recovering from an intraday low of $2,380.40 to trade near $2,415.00 as of the London PM fix, according to LBMA data.

The data-dependent shift in rate expectations comes ahead of the Federal Open Market Committee's two-day meeting starting July 29. Markets are now pricing in a 68% probability of a 25-basis-point rate cut at the September meeting, up from 52% before the data release, according to CME FedWatch data.

Gold at current levels sits 3.8% below its all-time high of $2,511.30 set in April 2026. The metal has gained 14% year-to-date, outperforming the S&P 500's 8% advance over the same period, as geopolitical uncertainty and central bank buying have provided a sustained floor.

The next catalyst for gold prices will be the FOMC decision on July 30 and the July nonfarm payrolls report on Aug. 7, both of which will shape the trajectory of rate expectations heading into the second half of the year.

This article is for informational purposes only and does not constitute investment advice.