Gold Hits Four-Month High Ahead of U.S. Labor Data

BEIJING, China – Gold prices surged to a more than four-month high on Monday, coming within $23 of an all-time record, as investors reacted to increasing expectations of a U.S. Federal Reserve interest rate cut and a weakening dollar.

By 9:37 a.m. EDT (1337 GMT), spot gold was trading at $3,477.56 per ounce, a 0.9% gain, marking its highest level since April 22, when it previously reached $3,500.05. Similarly, U.S. gold futures for December delivery rose by 0.9%, reaching $3,547.70.

Silver also saw significant gains, jumping 2.6% to $40.69 per ounce, its highest price since 2011. Market activities occurred amid the closure of U.S. markets for the Labor Day holiday.

The dollar remained near its lowest point since late July, making gold more affordable for international buyers. ‘Gold, particularly silver, extended Friday’s strong gains, supported by persistent U.S. inflation and weakening consumer sentiment,’ said Ole Hansen, head of commodity strategy at Saxo Bank.

Additionally, the U.S. personal consumption expenditures index increased by 0.2% month-on-month and 2.6% year-on-year as reported last Friday, coinciding with growing anticipation of a Fed rate cut.

Tim Waterer, chief market analyst at KCM Trade, noted that ‘silver is making a move higher in response to expectations of lower rates, while a tight supply market is helping to maintain an upward bias.’

On the political front, San Francisco Federal Reserve Bank President Mary Daly expressed her support for a rate cut due to labor market concerns. UBS analyst Giovanni Staunovo highlighted the market’s focus on the upcoming U.S. job market report expected on Friday, which may influence the Fed’s decision on interest rates.

According to a Reuters poll, August non-farm payrolls are anticipated to grow by 78,000 jobs, compared to 73,000 in July. Typically, gold prices perform well in low-interest-rate environments.

In other commodities, platinum increased by 3.2% to $1,408.54 and palladium rose by 1.9% to $1,129.70.