Gold (XAU/USD) continued its record-breaking rally on Tuesday to a new all-time high near $3,660, marking the third consecutive day of gains and entering uncharted territory. At the time of writing, XAU/USD was trading around $3,650, up nearly 0.50% on the day.

A generally weaker US dollar (USD) has fueled the rally, making gold more attractive to foreign buyers. At the same time, a series of disappointing US labor market data has reinforced speculation that the Federal Reserve (Fed) will cut borrowing costs at its September 16-17 meeting. The prospect of looser monetary policy has also boosted demand for bullion, keeping investor interest buoyed.

Constant buying by central banks added another layer of support, as major foreign exchange reserve holders diversified away from the US dollar. Furthermore, concerns over global trade frictions related to US tariffs, alongside broader geopolitical tensions, have driven safe-haven funds into gold. Meanwhile, uncertainty over the Fed's independence amid mounting political pressure has heightened market anxiety. Overall, this has helped maintain demand for gold amid rising risk aversion.

Looking ahead, traders will be closely watching the revision of the benchmark US Nonfarm Payrolls, due at 14:00 GMT, which could reshape the labor market narrative. Initial estimates point to a sharp downward adjustment, potentially eliminating up to 800,000 jobs. A deeper revision would reinforce the view that the US economy is slowing faster than reported, further bolstering the argument for monetary policy easing and maintaining gold's bullish momentum. (alg)

Source: FXstreet