Gold Ends August at Record Highs: Can $3,500 Hold?
Thursday, September 4th 2025
Gold broke free from its summer lull in dramatic fashion, surging into record territory as August came to a close. Spot prices ended the month at $3,443.50 an ounce, marking a 2% weekly gain and nearly 5% for the month, while futures contracts pushed decisively through the $3,500 threshold.
Powell’s Shift Sparks Renewed Momentum
The turning point came at the Jackson Hole Symposium, where Fed Chair Jerome Powell struck a softer tone. Instead of doubling down on the 2% inflation target, Powell emphasized concerns over slowing growth and labor market weakness.
This shift triggered a buy signal for many gold analysts. Michele Schneider, Chief Strategist at MarketGauge, said Powell’s remarks “showed markets that he is not overly concerned with getting inflation back down to 2%,” highlighting instead the Fed’s growing focus on economic fragility.
Inflation Steady, But Markets Look Past It
The Core PCE Index—the Fed’s preferred inflation gauge—rose 2.9% year-over-year through July, in line with expectations. Despite this, markets remain almost fully convinced that a September rate cut is coming.
Chris Zaccarelli of Northlight Asset Management said as long as September’s PPI and CPI data don’t produce a major inflation shock, “the Fed will be almost guaranteed to cut interest rates by 0.25%.”
Technical Milestone: Futures Above $3,500
Phillip Streible, Chief Market Strategist at Blue Line Futures, noted that while momentum is strong, he wants to see both spot and futures prices close above $3,500 to confirm the breakout.
December futures—the most actively traded CME contract—finished at $3,511.50 per ounce, up 1% on the day and 3% for the week. Streible described the rally as gold “sniffing out stagflation,” a condition of slowing growth paired with stubborn inflation.
Jobs Data: The Next Big Catalyst
All eyes now turn to Friday’s nonfarm payrolls report, seen as the most critical event for gold in the coming week.
- Bill Adams, Chief Economist at Comerica Bank, expects a modest pickup of 45,000 jobs in August with unemployment steady at 4.2%.
- A weak reading would likely seal the Fed’s rate-cut case, providing fresh fuel for gold’s rally.
Politics Enter the Equation
Beyond economic data, U.S. politics is proving just as influential. President Donald Trump’s escalating conflict with the Federal Reserve is undermining confidence in the U.S. dollar.
In a controversial move, Trump is targeting Fed Governor Lisa Cook, seeking her removal over unproven allegations tied to mortgage agreements. Although no charges have been filed, analysts warn the Fed’s independence is at risk.
“Trump controls the Fed narrative now, which means rates will come down and the gold price will move higher,” said Naeem Aslam, CIO at Zaye Capital Markets.
Dollar Weakness Boosts the Case for Gold
According to Chantelle Schieven of Capitalight Research, political interference combined with dovish monetary policy could accelerate the dollar’s decline as the world’s reserve currency. She warned that in such an environment, “there is no telling how high gold prices can go.”
Outlook: A Historic Breakout in Motion
With futures closing firmly above $3,500, the market is testing uncharted territory. Analysts agree that the rally’s drivers—Fed easing, stagflation risks, and political uncertainty—remain firmly in play.
For now, the question is no longer if gold can break records, but how far this bull run can extend into the final stretch of 2025.
