Gold prices held near record highs on Monday, following strong gains last week as a weak U.S. jobs report fueled expectations of a Federal Reserve rate cut as early as next week.
Spot gold prices held steady at $3,585.68 per ounce, just below Friday’s all-time high of $3,600.03. December gold futures fell 0.7% to $3,626.52 per ounce as of 01:39 ET (1:39 pm GMT).
Gold prices rose more than 4% last week, extending gains to nine of the past ten trading days. Year to date, gold prices have risen nearly 37%, driven by safe-haven demand stemming from President Trump’s trade policies and strong purchasing power from central banks, particularly China.
Weak US jobs data strengthens expectations of a Fed rate cut.
The latest US jobs report showed a sharp slowdown in job growth and a rise in the unemployment rate to 4.3%, reinforcing market expectations that the Federal Reserve will cut interest rates by 25 basis points at its September meeting, with a larger cut of 50 basis points more likely.
Lower interest rates reduce the opportunity cost of holding non-yielding assets such as gold and weaken the US dollar, making gold more attractive to investors.
U.S. dollar index futures, which measure the greenback against a basket of major currencies, were little changed on Monday, continuing their weakness after a sharp drop following Friday’s jobs data release.
Market observers now await Thursday’s US inflation report, which could further influence Fed policy expectations and gold prices.
