--- title: What More Interest Rate Cuts Will Do to the Price of Gold description: With the Federal reserve expected to continue cutting interest rates, here's who it could impact the price of gold. authors: - name: Marc Guberti url: https://money.com/author/marc-guberti/ bio: Marc Guberti is a personal finance writer who hosts Breakthrough Success, a podcast where he teaches listeners how to grow their businesses and achieve personal transformations. at_money_since: 2024 articles: 437 covers: - Investing - Banking - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Health and Wellness - Housing - Identity Theft - Insurance - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Retirement - Shopping - Taxes editors: - name: Jordan Chussler role: Editor, Investing and Banking url: https://money.com/author/jordan-chussler/ bio: Jordan is an investment editor and CPFC who specializes in traditional equities, gold and other precious metals, retirement savings and income investing. He combines his personal and professional interests in finance and education to help readers increase their financial literacy and make better investment choices. education: Lynn University certifications: Certified Personal Finance Counselor at_money_since: 2023 articles: 131 covers: - Investing - Banking - Credit - Credit Cards - Economy and Politics - Housing - Identity Theft - Insurance - Loans - Mortgages - Personal Finance - Professional Services - Retirement also_seen_in: - Weiss Ratings - 24/7 Wall Street - Better Investing - Yahoo Finance - Nasdaq - Investing.com - Marketbeat - MSN Money social: - https://www.linkedin.com/in/jordan-chussler-b3597811/ updaters: - name: Gabriel O. Rodriguez Cruz role: Associate Editor url: https://money.com/author/gabriel-rodriguez/ bio: Gabriel Rodríguez is an editor at Money who has been writing and editing crypto content for over five years. His goal is to make crypto less cryptic, helping newcomers avoid common pitfalls and scams present in the industry. education: University of Puerto Rico Rio Piedras at_money_since: 2018 articles: 101 covers: - Investing - Banking - Business - Career Advice - Credit - Economy and Politics - Housing - Identity Theft - Insurance - Lifestyle - Mortgages - Personal Finance - Pets - Professional Services - Retirement - Shopping - Taxes - Technology social: - https://www.linkedin.com/in/gabriel-rodriguez-cruz/ published: '2026-02-20T16:07:02.000Z' modified: '2026-08-03T15:33:38.000Z' section: Investing word_count: 842 canonical: https://money.com/interest-rate-cuts-and-the-price-of-gold/ type: Article source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Close-up of a hand changing a wooden dice from an ascending to a descending arrow](https://img.money.com/2024/12/Gold-Price-Interest-Rates-Cut1.jpg) ## Our Partners ### TOP PARTNER ![Invest in Gold](https://s3.consumersadvocate.org/prd/image/image/19305/medium_414558a1-29d4-465e-b5d1-921febc39ed2.png) Our Partner [Invest in Gold](https://money.com/go/bb96e1448dd0?ap_referrer=%2Finterest-rate-cuts-and-the-price-of-gold%2F&bidid=4072812483&ptid=666656390&ptoken=067050a4c56a1850bfe294ee92c92111&zip=20149&apxa1=why-gold-prices-skyrocketed-in-2025) **Receive Up to $25,000 in Free Silver** - Inc. 5000 Top Gold Company with A+ BBB Rating - Same-day IRA Processing - Start Instantly - 100% Satisfaction Guaranteed: 7-Day Full Refund Cancellation on Eligible Assets – No Penalties - Free FREEDOM Package: Setup, Insured Shipping, and Secure Storage * * * ![Invest in Gold](https://s3.consumersadvocate.org/prd/image/image/31339/medium_3b3cf6d5-62e2-410b-9221-8742bac91a03.webp) Our Partner [Invest in Gold](https://money.com/go/c9430367f33a?ap_referrer=%2Finterest-rate-cuts-and-the-price-of-gold%2F&bidid=4072812485&ptid=666656390&ptoken=699a5af37c4d3c980409c40f723abf64&zip=20149&apxa1=why-gold-prices-skyrocketed-in-2025) **Named ‘Best Overall’ Gold IRA by Money, Trusted by 100K+ Investors** - Save Up to $35,000 in Fees — More Money in Your Pocket - Beat 40% Competitor Spreads — Up to $35,000 Advantage - 0 Complaints With the BBB and 5,000+ 5-Star Ratings - 100% Buyback Success Rate — Never Denied Since 2012 - 7-Day Satisfaction Guarantee — Cancel Anytime in the First Week * * * ![Invest in Gold](https://s3.consumersadvocate.org/prd/image/image/21155/medium_2ce64332-874c-41c0-a3b9-7f738e834f1c.png) Our Partner [Invest in Gold](https://money.com/go/948830147836?ap_referrer=%2Finterest-rate-cuts-and-the-price-of-gold%2F&bidid=4072812481&ptid=666656390&ptoken=7ef023a8c611d582bc4ab046638b408b&zip=20149&apxa1=why-gold-prices-skyrocketed-in-2025) **Special Offer - Get Up to 10% in Bonus Silver** - Required Minimum Buy of $10,000 - Highest Industry Buyback Guarantee - Winners of "Best Customer Service" and "Gold IRA Education" plus only 9X INC5000 Award Recipient - Over 8,000 5-STAR Reviews from Google, TrustPilot, Consumer Affairs, Retirement Living and the Better Business Bureau - Endorsed by Sean Hannity, Tom Selleck, and Dennis Quaid * * * ![Invest in Gold](https://s3.consumersadvocate.org/prd/image/image/24353/medium_69e2748f-b29f-4686-895b-4e103b4d0c3e.png) Our Partner [Invest in Gold](https://money.com/go/3003498fdd5c?ap_referrer=%2Finterest-rate-cuts-and-the-price-of-gold%2F&bidid=4072812488&ptid=666656390&ptoken=c0ec2dc1d10409321be73e521391047b&zip=20149&apxa1=why-gold-prices-skyrocketed-in-2025) **Endorsed by Robert Kiyosaki — Up to $25K in FREE Silver on Qualifying Purchases** - #1 Ranked Gold Company on the 2025 Inc. 5000 — America's Fastest Growing Companies - Zero Account Setup Fees + Fast, Free Insured Shipping on All Orders - 100% No-Cost IRA or 401(k) Rollover With Dedicated Specialists - Guaranteed Buyback Program — Sell Back Metals With No Fees - A+ BBB-rated Precious Metals Firm With 20+ years of experience * * * ![Invest in Gold](https://s3.consumersadvocate.org/prd/image/image/25479/medium_48bb5ee6-6fc5-4d90-9017-58be27cdb748.png) Our Partner [Invest in Gold](https://money.com/go/58109cc1a46b?ap_referrer=%2Finterest-rate-cuts-and-the-price-of-gold%2F&bidid=4072812478&ptid=666656390&ptoken=44701cacd16d586219e07ad11bd61c7b&zip=20149&apxa1=why-gold-prices-skyrocketed-in-2025) **Longest time in business with 27 years of experience** - Recommended by Glenn Beck and Judge Andrew P. Napolitano - Get a $500 account credit - Free expert Gold IRA set up and storage service - Trusted by over 90,000 customers - Rated excellent on Truspilot & AAA on Business Consumer Alliance * * * ![Invest in Gold](https://s3.consumersadvocate.org/prd/image/image/39716/medium_e8e85b3c-b833-485e-83eb-1b3c2d1dcdd5.webp) Our Partner [Invest in Gold](https://money.com/go/c1edf624a391?ap_referrer=%2Finterest-rate-cuts-and-the-price-of-gold%2F&bidid=4072812490&ptid=666656390&ptoken=ae9f8d4bd9ae0118424876d127ebbd17&zip=20149&apxa1=why-gold-prices-skyrocketed-in-2025) **Up to $20,000 In Free Silver On Qualifying Orders\*** - Tax-Free & Penalty-Free Gold IRA Setup - Free Shipping & Insurance + Storage up to 3 years - BBB A-Rated & Accredited - Great Price Guarantee, No Buyback Fees - Industry Leading Specialists The Federal Reserve cut interest rates multiple times in 2025, lowering borrowing costs as inflation continued to cool from its post-pandemic highs. The central bank held rates steady at its January 2026 meeting, though policymakers have signaled that further cuts remain possible if economic growth slows and price pressures keep easing. While it’s unclear how much the Fed will lower the benchmark effective federal funds rate this year, many economists expect at least modest cuts in 2026. Drops in interest rates significantly impact financial markets, but how will lower rates affect the [price of gold](https://money.com/what-drives-the-price-of-gold/)? ## How interest rates affect global markets Interest rates dictate the cost of borrowing money. Lower rates make it easier for individuals and businesses to take out loans — which puts more money into the economy — and for companies to hire more people and make more investments with the extra cash. Lower interest rates also help consumers buy more products and services. Increased consumption leads to inflation, as companies will raise their prices based on heightened demand. That’s good news for many investments, such as stocks, real estate and [gold](https://money.com/how-to-buy-gold/), since lower interest rates increase the value of each of these assets. However, higher interest rates have the opposite effect: They reflect a contractionary monetary policy and reduce inflation. Interest rate hikes may become necessary if inflation runs out of control, as we saw in 2022. Higher rates discourage businesses from making investments and cause consumers to tighten their budgets. ## What lower interest rates mean for gold Lower interest rates are favorable for gold since they increase the money supply. More dollars chase fewer goods and services, causing [currencies](https://money.com/what-is-fiat-money/) to lose their value. Gold retains its intrinsic value, which means investors need more dollars to buy the same asset. Lower rates also raise asset prices. Inflation and the level of uncertainty are two driving forces that [impact gold prices](https://money.com/heres-how-inflation-impacts-gold-prices/). While stocks and real estate have those factors as well, investors also have to consider factors like corporate earnings, property market valuations and other variables. For some asset classes and individual investments, other issues can minimize the impact of lower interest rates. Meanwhile, gold is always positioned to gain value when interest rates decline. ## Does gold always go up when interest rates go down? In most cases, gold will gain value as interest rates drop. We saw that dynamic play out in 2025, when gold climbed sharply amid the Fed’s rate cuts and strong central bank demand. However, lower rates are only one variable. While they can provide a tailwind for gold, lower inflation rates can act as a headwind that offset the gains from lower interest rates. Inflation has dropped significantly from its 2022 peak and has hovered closer to the Fed’s 2% target in recent months, though progress has been uneven. Interestingly, gold remained flat in 2022 despite record inflation, which demonstrates that changes to interest rates and inflation can cancel each other out and minimize gold’s price movements. Gold can also lose value if economic or geopolitical issues start to ease, as the [precious metal](https://money.com/investing-in-precious-metals/) is viewed as a safe-haven asset that provides investors with stability during uncertain times. However, the opposite is also true, as gold may underperform stocks and real estate during less tumultuous times. ## Should investors buy gold? [Investing in gold](https://money.com/why-invest-in-gold/) can be a smart move for investors who want to hedge against inflation and diversify their portfolios. Many experts recommend having 5%–10% of your portfolio allocated to alternative assets, including gold. Despite being considered safe-haven assets, precious metals still have risks. However, their lack of correlation with the stock market gives [investors](https://money.com/who-is-the-average-gold-investor/) an advantage. Gold gains can minimize the impact of a stock market correction. Furthermore, [precious metals](https://money.com/what-makes-a-metal-precious/) are poised to gain value as interest rates decline. Gold also appreciates each time the Fed decides to print more money, as devaluing paper currency results in comparative gains for the yellow metal. Investing just 5%–10% of your portfolio in gold gives you the flexibility to pursue asset classes, like stocks and real estate, that can outperform precious metals during bull markets. The two aforementioned assets can also [generate income](https://money.com/how-to-use-gold-for-retirement-income/) via dividends and rental income, which becomes valuable cash flow that could eventually replace your income as you age. Unlike many other assets, gold has withstood the test of time. It’s been a medium of exchange for thousands of years, and it’s an essential resource for many industries. It’s used in automobiles, smartphones, dentistry and other products and services. Society would have a difficult time functioning properly without gold. Investors also have the option of opening a gold individual retirement account (or gold IRA) to capitalize on tax benefits. You can reduce your current tax bill with a traditional gold IRA or avoid taxes on capital gains with a Roth gold IRA. These can help you build a strong nest egg with alternative assets to complement your traditional retirement accounts by the time you retire. ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/interest-rate-cuts-and-the-price-of-gold/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Investing", "item": "https://money.com/investing/" }, { "@type": "ListItem", "position": 3, "name": "Gold", "item": "https://money.com/gold/" }, { "@type": "ListItem", "position": 4, "name": "What More Interest Rate Cuts Will Do to the Price of Gold" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/interest-rate-cuts-and-the-price-of-gold/#webpage", "url": "https://money.com/interest-rate-cuts-and-the-price-of-gold/", "name": "What More Interest Rate Cuts Will Do to the Price of Gold", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2026-02-20T16:07:02.000Z", "mainEntity": { "@id": "https://money.com/interest-rate-cuts-and-the-price-of-gold/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/interest-rate-cuts-and-the-price-of-gold/#breadcrumb" }, "dateModified": "2026-08-03T15:33:38.000Z" }, { "@type": "Article", "headline": "What More Interest Rate Cuts Will Do to the Price of Gold", "articleSection": "Investing", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2024/12/Gold-Price-Interest-Rates-Cut1.jpg", "width": 1395, "height": 930, "caption": "Gold-Price-Interest-Rates-Cut" } ], "author": [ { "@type": "Person", "name": "Marc Guberti", "url": "https://money.com/author/marc-guberti/", "@id": "https://money.com/author/marc-guberti/#author", "description": "Marc Guberti is a personal finance writer who hosts Breakthrough Success, a podcast where he teaches listeners how to grow their businesses and achieve personal transformations.", "worksFor": { "@id": "https://money.com/#organization" } } ], "publisher": "https://money.com/#organization", "datePublished": "2026-02-20T16:07:02.000Z", "description": "With the Federal reserve expected to continue cutting interest rates, here's who it could impact the price of gold.", "abstract": "With the Federal reserve expected to continue cutting interest rates, here's who it could impact the price of gold.", "@id": "https://money.com/interest-rate-cuts-and-the-price-of-gold/", "inLanguage": "en-US", "dateModified": "2026-08-03T15:33:38.000Z", "editor": [ { "@type": "Person", "name": "Jordan Chussler", "url": "https://money.com/author/jordan-chussler/", "@id": "https://money.com/author/jordan-chussler/#author", "description": "Jordan is an investment editor and CPFC who specializes in traditional equities, gold and other precious metals, retirement savings and income investing. 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