Gold prices achieved a historic milestone on Monday, surging past the $3,600 threshold for the first time as weak U.S. employment data strengthened expectations for Federal Reserve interest rate cuts. Spot gold climbed 0.9% to $3,617.79 per ounce at 1209 GMT, after reaching an unprecedented peak of $3,622.07 earlier in the session.
The precious metal’s rally gained momentum following Friday’s disappointing U.S. jobs report, which revealed sharply weakened employment growth in August. The unemployment rate jumped to 4.3%, marking a nearly four-year high and cementing the case for monetary policy easing next week.
Bullion has delivered exceptional returns with a 37% surge so far this year, building on an already impressive 27% gain in 2024. This remarkable performance reflects multiple supporting factors, including a weaker dollar, robust central bank purchasing, accommodative monetary policies, and persistent geopolitical uncertainties.
Traders have priced in an 88% probability 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 gold while simultaneously weakening the dollar, making bullion more attractive to international investors.
Market focus now turns to Wednesday’s Producer Price Index and Thursday’s Consumer Price Index data, which could provide additional clarity on the Federal Reserve’s rate cut magnitude.
Broader Precious Metals Rally
The precious metals complex experienced widespread gains, with spot silver rising 0.6% to $41.22 per ounce. Platinum climbed 0.6% to $1,381.61, while palladium posted the strongest performance with a 1.4% increase to $1,125.19.
