Gold Steadies Near Record High on Fed Rate Cut Hopes

Highlights:

• Spot gold traded at $US3,586.81 per ounce, near Friday’s record of $US3,599.89.
• Soft U.S. labor data has heightened expectations that the Federal Reserve will move ahead with a rate cut later this month.
• Gold is up 37% year-to-date in 2025, following a 27% gain in 2024.

Bullion Trades Close to $US3,600 Mark

Gold prices remained near record levels on Monday, supported by growing expectations of an imminent U.S. Federal Reserve rate cut. Spot gold was steady at $US3,586.81 per ounce as of 10:21 a.m., only slightly below Friday’s record of $US3,599.89. U.S. gold futures for December delivery, however, slipped 0.7% to $US3,626.10.

Weak U.S. Job Data Fuels Fed Speculation

The optimism for rate cuts stems from disappointing U.S. labour data released last week. August saw a significant slowdown in job creation, with the unemployment rate rising to 4.3%—its highest level in close to four years. These figures underscored softening labour market conditions and bolstered the case for policy easing. Data from the CME FedWatch Tool shows that traders are fully expecting a quarter-point rate cut at the Fed’s next meeting, while also assigning an 8% chance of a more aggressive half-point reduction.

Drivers of Gold’s Rally

At the time of writing, gold has advanced 37% in 2025, extending the 27% rally recorded in 2024.Falling interest rates lessen the trade-off of holding non-yielding assets such as gold, while weakening the U.S. dollar and boosting bullion’s appeal to international investors. Additional support has come from ongoing central bank purchases, geopolitical uncertainty, and a softer monetary policy backdrop.

In August, China’s central bank expanded its gold reserves for the tenth straight month, while investor speculation grew as net long positions climbed by 20,740 contracts to 168,862 for the week ending September 2.

Broader Precious Metals Market

Other precious metals showed mixed movements. Spot silver slipped 0.5% to $US40.75 per ounce, platinum edged 0.1% higher to $US1,374.35, while palladium held steady at $US1,109.71.

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