Gold's rally extended beyond the $3,600 level for the first time on Monday after weak US employment data reinforced expectations of a Federal Reserve interest rate cut next week.
Spot gold rose 0.9% to $3,617.79 per oz at 12:09 GMT after hitting a record high of $3,622.07 earlier in the session. Bullion prices have surged about 37% so far this year, extending their 27% rally in 2024, driven by a weaker dollar, strong central bank buying, a weak monetary policy environment, and geopolitical and economic uncertainty.
US gold futures for December delivery were unchanged at $3,657.20. US job growth weakened sharply in August, data showed on Friday, and the unemployment rate rose to a nearly four-year high of 4.3%, confirming a weaker labor market and strengthening the case for a Fed rate cut next week.
"(The rate cut bets) are driving gold demand. Furthermore, the overall geopolitical scenario is very uncertain... we have to consider that a significant portion of demand also comes from central bank purchases," said Carlo Alberto De Casa, an external analyst at the Swissquote banking group.
Traders have priced in an 88% chance of a 25 basis point rate cut next week, according to the CME FedWatch tool. Lower interest rates reduce the opportunity cost of holding non-yielding bullion and weigh on the dollar, making gold cheaper for investors holding other currencies.
"We expect gold to rise to $3,700/oz by the middle of next year," said UBS analyst Giovanni Staunovo. Meanwhile, the yield on the benchmark 10-year US Treasury bond is near a five-month low. Focus now turns to the US Producer Price Index data on Wednesday and the Consumer Price Index on Thursday, which could provide further clarity on the magnitude of the Fed's expected interest rate cut.
Meanwhile, China's central bank added gold to its reserves in August, extending its bullion purchases for the 10th consecutive month, official data showed on Sunday. Elsewhere, spot silver rose 0.6% to $41.22 an ounce. Platinum rose 0.6% to $1,381.61, and palladium gained 1.4% to $1,125.19. (alg)
Source: Reuters
Gold prices weakened slightly on Thursday (February 12th), as more solid US employment data reduced market confidence in an imminent Federal Reserve interest rate cut. The strong employment data promp...
Gold prices strengthened on Wednesday, supported by a weaker US dollar and falling US bond yields after the latest economic data reinforced the narrative that the Federal Reserve is likely to continue...
Gold experienced a slight correction in the European session on Tuesday (February 10th), but remained above $5,000/oz as the market held its breath ahead of a series of US data that could alter intere...
Gold held above the psychological $5,000 level at the start of the week, supported by a combination of factors that are "right" for the precious metal : physical demand from China, expectations of low...
Gold prices are still struggling to turn an intraday rebound into a sustained rally. After briefly falling to $4,654 (a four day low) and rebounding, prices were again rejected near $4,900. In the Eur...
Oil prices stabilized on Thursday (February 12th), as the market reassigned a risk premium to US-Iran tensions despite US inventory data showing swelling domestic supplies. This movement confirms one thing: geopolitical headlines are still more...
Gold prices weakened slightly on Thursday (February 12th), as more solid US employment data reduced market confidence in an imminent Federal Reserve interest rate cut. The strong employment data prompted market participants to shift expectations of...
The Hang Seng Index reversed its downward trend in Hong Kong on Thursday (February 12th), weakening by around 0.9% to around 27,000 after a strong session earlier. This decline halted the momentum of the short term rally, as investors began to...