Gold prices gained on Thursday, August 28, 2025, as investors positioned ahead of the latest U.S. personal consumption expenditures (PCE) report, a closely watched inflation measure used by the Federal Reserve. The data, due Friday, is expected to show the fastest annual price acceleration in five months. Stronger inflation could complicate the central bank’s ability to cut rates despite growing market expectations for policy easing.
The metal rose 0.6% to $3,416.85 an ounce in New York trading, benefiting from a weaker U.S. dollar. The Bloomberg Dollar Spot Index declined 0.3%, while silver, platinum, and palladium also advanced.
Markets are still pricing in over an 80% chance of a September rate cut, according to swaps data. Sentiment strengthened after Fed Chair Jerome Powell signaled openness to easing at the central bank’s recent policy symposium. However, Powell stressed that uncertainty around both inflation and labor market trends remains high, particularly as new tariffs from President Donald Trump begin to filter through the economy.
Lower interest rates tend to be supportive of gold because the metal carries no yield. With borrowing costs expected to decline, gold has retained a firm bid despite consolidating below its record high above $3,500 an ounce reached in April.
Beyond inflation data, investors are monitoring political developments that could impact the Fed’s independence. Fed Governor Lisa Cook filed a lawsuit challenging President Trump’s attempt to remove her from the board over allegations of past mortgage fraud. If Trump succeeds, he could reshape the central bank with a majority of appointees more aligned with his calls for lower rates.
Markets fear that such a shift could undermine the Fed’s credibility and spark concerns about future inflation, further enhancing gold’s role as a safe-haven asset.
Gold’s gains come against a backdrop of global uncertainties. Trade frictions, geopolitical tensions, and central bank diversification away from the U.S. dollar continue to provide long-term support. Exchange-traded fund inflows into gold remain steady, signaling persistent investor appetite for protection against macroeconomic risks.
While gold has largely traded within a range since April’s peak, analysts suggest that upcoming inflation data and political developments around the Fed could serve as near-term catalysts.