Market bets on a 50 basis point rate cut by the Federal Reserve next week have increased, with gold prices hitting a new all-time high at $2,580... On Friday, as bets on a 50 basis point rate cut by the Federal Reserve next week rose, spot gold continued to climb on the back of a nearly 2% surge overnight, reaching $2,580 per ounce, setting a new record high; COMEX gold futures rose by more than 1%, standing above $2,600 per ounce.

Spot silver also followed the gold price increase, rising by more than 2.5% during the day.

COMEX silver futures stood above $31 per ounce, with a nearly 3% increase during the day.

According to the CME FedWatch Tool, bets on a 50 basis point rate cut by the Federal Reserve next week rose from 28% yesterday to 43%.

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CPI and PPI data released earlier this week supported expectations for moderate PCE data at the end of this month, leading some investors to anticipate that the Federal Reserve will be more concerned about employment issues.

At the same time, it was reported that officials, believing inflation is under control and concerned about employment issues, are considering more aggressive monetary easing policies.

Former influential New York Fed Chairman Dudley stated at a forum in Singapore, "There is ample reason to support a 50 basis point rate cut."

City Index market strategist Fiona Cincotta said, "So far, I have been firmly in the camp expecting a 25 basis point rate cut.

But the market's performance actually makes me feel that they might think the cut could reach 50 basis points.

Now the outcome of next week's rate decision is like flipping a coin, considering the reactions we see in bonds, yen, dollars, and gold, that's what the market is showing."

Commonwealth Bank of Australia strategist Carol Kong believes that the market is overpricing the Federal Reserve's easing policies.

She wrote in a report, "We continue to lean towards a 25 basis point rate cut rather than a 50 basis point cut, as the labor market and the broader economy remain resilient.

Compared to historical rate cut cycles outside of economic recessions, current market pricing is aggressive.

Our consensus with American economists is that a recession can be avoided."

Supported by the path of the Federal Reserve's monetary easing, gold has soared by about a quarter this year.

Central bank purchases and strong safe-haven demand due to conflicts in the Middle East and Russia-Ukraine have supported the rise.

Interest from retail investors is also increasing.

IG Asia Pte market strategist Jun Rong Yeap said that the PPI data gives "the Federal Reserve room to consider a more significant rate cut.

The gold price hitting a new all-time high reinforces the overall upward trend of gold prices."

Investors ending their bearish bets on gold could also be a reason for the rise in gold prices.

According to the latest data, the total amount of short positions of fund managers in Comex gold futures was at its highest level in four weeks as of September 3.

Pepperstone Group Ltd. research director Chris Weston said, "Gold is now more used as a hedging tool in the portfolio."

He pointed out that the weak initial jobless claims data on Thursday suggests that fund managers may see gold as a place to put money in case the US economy worsens, which would further boost gold prices.

Fxstreet analysts said that gold prices have broken through the consolidation range, reaching a symmetrical triangle target of a month and a half, that is, $2,560, and the 14-day Relative Strength Index (RSI) is still in the bullish area, with more room to rise before breaking through the overbought boundary.

If the gold price continues its bullish momentum, the next upward obstacle is at the $2,600 level, and after breaking through, it will test the psychological level of $2,650.

If there is a correction, the initial support level is at the previous historical high of $2,532.