Gold prices remained stable near record highs, bolstered by expectations of a Federal Reserve rate cut due to a softening US labor market. Continued central bank buying and a weaker dollar also contributed to the precious metal’s strong performance this year. Investors are now awaiting upcoming US economic data to further inform the Federal Reserve’s monetary policy decisions.
- Gold prices held steady near $3,590 per ounce.
- A weak US jobs report increased expectations of a Federal Reserve rate cut.
- The US economy added fewer jobs than expected in August, and unemployment rose.
- Traders assign a 90% chance of a 25bps rate cut at the upcoming Fed meeting.
- The People’s Bank of China increased its gold holdings for a 10th straight month.
- Gold has surged nearly 37% this year.
- Factors contributing to the surge include a weaker dollar, monetary policy easing, sustained central bank buying, and geopolitical uncertainty.
The current environment appears highly supportive of gold. The expectation of lower interest rates reduces the opportunity cost of holding gold, making it a more attractive investment. Continued purchases by central banks further validate gold’s role as a safe haven asset, and economic uncertainty around the world creates demand for stable investments.