Weekly Gold Price Movement
As of Monday, May 5, 2025, the spot price of gold is $3,314 per ounce, continuing a historic surge that has defined the yellow metal's trajectory throughout 2025. This marks a significant rise from around $3,277 per ounce just one week ago, reflecting growing investor confidence that the Federal Reserve may soon begin cutting interest rates.
Monetary Policy Shifts and Fed Expectations
The recent rally in gold can be largely attributed to the shifting sentiment around U.S. monetary policy. Investors are increasingly factoring in at least one interest rate cut by September 2025. This sentiment was significantly reinforced by the latest U.S. nonfarm payrolls report, which showed a mere 175,000 jobs added in April, falling short of the consensus expectation of 240,000. The report also indicated a decrease in wage pressures, with average hourly earnings rising just 0.2% for the month.
These weaker-than-expected employment numbers led to a sharp decline in Treasury yields and strengthened market expectations that the Fed will begin easing policy to avoid an economic slowdown. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold, helping to drive prices higher.
Central Bank and Retail Demand
Adding to the bullish case, central banks continue to be net buyers of gold, particularly in emerging economies such as China, India, and Turkey. According to the World Gold Council's Q1 2025 Gold Demand Trends report, central bank purchases remained robust, with over 290 tonnes of gold added to official reserves globally in the first quarter—a record for Q1 demand.
Retail demand has also surged. Gold-backed ETFs, which had seen months of outflows during 2023 and 2024, reported net inflows in April as investors re-entered the market, seeking a hedge against economic uncertainty and potential currency debasement.
Geopolitical Uncertainty Continues to Support Safe-Haven Flows
Global tensions are at a high, providing another strong support for gold. Renewed hostilities involving Iran, continued instability in Ukraine, and broader Middle East tensions have heightened geopolitical risk. In such times of international instability, investors often turn to gold as a safe-haven asset that maintains value. Commentary from geopolitical analysts in the Financial Times and Reuters has repeatedly highlighted gold's resilience during times of conflict and military escalation.
Looking ahead, several critical events could shape the direction of gold in the near term. The U.S. Consumer Price Index (CPI) report for April 2025 is due on May 14 and will be a major indicator of how inflation is progressing. If inflation continues to trend downward, it could strengthen the case for Fed rate cuts—further boosting gold prices. However, an upside inflation surprise might complicate that trajectory.
Investors are also awaiting the minutes from the Federal Open Market Committee (FOMC) meeting, which will be released on May 22, 2025. These minutes could provide valuable insights into the internal thinking of Fed policymakers and their thresholds for monetary easing. Additionally, speeches by key Fed officials are scheduled throughout mid-May, and markets will parse their language closely for any softening or hardening of policy stances.
Gold's surge to $3,314 per ounce represents more than just a technical rally—it reflects a broader macroeconomic pivot. With economic growth showing signs of cooling, inflation easing, central bank demand strengthening, and unresolved geopolitical risks, gold's allure as both a hedge and a safe haven is only growing stronger.
As we move deeper into Q2 2025, all eyes will be on the Fed's next moves, the April inflation print, and further geopolitical developments. Until those factors resolve decisively, gold will likely remain a favored asset in portfolios seeking security and strategic upside.
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byUnited States Gold Bureau