Gold prices have garnered fresh support as market expectations for additional Federal Reserve interest rate hikes cooled markedly. Nick Cawley, Contributing Analyst at UK bullion dealer Solomon Global, stated that the market’s probability pricing for rate increases has tumbled by more than 20 percentage points over the past week. This shift emerged even ahead of the latest inflation data release, reflecting investors’ growing caution over the prospect of another U.S. rate hike down the line.
He pointed out that muted recent inflation prints, paired with the weak nonfarm payroll employment report published last Friday, jointly drove this sentiment reversal.
Cawley argued that while markets are reassessing the Fed’s policy trajectory, the current pullback in hike odds is not sufficient to confirm the start of a full "rate cut trade".
## Tail Risks of Further Rate Hikes Have Been Priced Out
Kennedy shared that his firm had previously viewed gold’s first-half correction as a buying opportunity rather than a signal of a market top. "We purchased and added positions in GLDM near the technical bottom in July," he noted, explaining GLDM is a lower-expense share class variant of GLD.
Kennedy nevertheless emphASIzed that declining rate hike probabilities do not equate to the Fed being ready to pivot to rate cuts. "This is not a rate cut trade, at least not yet. The Fed has held rates steady in the 3.50%–3.75% range all year, and a September hike was a genuine possibility before the underwhelming payroll figures," he commented.
He added that the key change is the elimination of **rate hike tail risk** from market pricing. Wednesday’s U.S. Consumer Price Index (CPI) came in at 0.1% month-on-month and 3.4% year-on-year, with core CPI at 2.5%, broadly in line with forecasts and reinforcing the prevailing market narrative. "This is a fundamentally different backdrop from a formal rate-cutting cycle, and this distinction is critical when judging how much further this rally can extend," he stressed.
## Technical Structure Remains Bullish for Gold
From a technical analysis perspective, Cawley observed that gold broke above its 50-day moving average last week and dismantled the year-long pattern of lower highs, both bullish signals that underpin further upside momentum. He projected any pullbacks will likely be short-lived and viewed as favorable re-entry points for the next leg of gold’s rally.
## Capital Flows Shift Toward Gold Mining Equities
With gold maintaining its upward momentum, traders and investors are increASIngly turning to gold mining stocks to capture equity market upside. Independent trader and bestselling author of *The Millionaire Dropout*, Vince Stanzione, noted that many high-quality mining firms carry single-digit forward price-to-earnings ratios alongside attractive dividend yields.
He highlighted AngloGold Ashanti and S&P 500 constituent Newmont as compelling investment picks. Stanzione also mentioned that retail investors mostly gain exposure via exchange-traded funds: VanEck Gold Miners ETF (GDX), which tracks large-cap gold producers, and VanEck Junior Gold Miners ETF (GDXJ), focused on small and mid-tier mining companies.
Stanzione further explained numerous gold miners hold silver byproduct exposure, and silver typically trades in lockstep with bullion. Silver posted its strongest weekly performance since February last week.