Spot Gold scaled a new all-time high of $3,659.43/oz. on Tuesday, underpinned by rising expectations of a Federal Reserve interest rate cut this month, while the US Dollar retreated and US bond yields dropped.
Employers in all sectors of the US economy, excluding farming, added only 22,000 job positions in August, well below market consensus and the revised up 79,000 in July.
And, the unemployment rate went up to 4.3% in August, the highest since October 2021. The figures again highlighted signs of a cooling labor market.
Markets are now pricing in about an 89% chance of a 25 basis point Fed rate cut in September and an 11% chance of a super-sized 50 basis point cut.
Lower interest rates tend to reduce the opportunity cost of holding Gold, which pays no interest.
Also raising the appeal of Gold, the US Dollar Index slid to an almost seven-week low, while the US 10-year Treasury yield plunged to a five-month low.
“We probably will see more upside in gold from here provided that the U.S. central bank delivers with regards to market expectations of seeing multiple rate cuts,” KCM Trade Chief Market Analyst Tim Waterer was quoted as saying by Reuters.
Spot Gold was last up 0.26% on the day to trade at $3,645.13 per troy ounce.
Strong central bank buying, US tariff policies, potential rate cuts by the Federal Reserve and geopolitical uncertainty have fueled Gold’s rally to a series of record highs this year. Year-to-date, the yellow metal has surged 38%.
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