Gold Prices Notch Another Record High As Weak US Jobs Data Boosts Rate-Cut Hopes

Gold prices edged past the $3,600 per ounce mark for the first time on Monday on increased bets of a rate cut by the U.S. Federal Reserve after a tepid jobs report.

Spot gold prices rose 0.5% to $3,605.13 per ounce at 03.16 a.m. ET, while U.S. gold futures edged slightly lower at $3,639.10 per ounce. Retail sentiment on Stocktwits about the SPDR Gold Shares ETF (GLD) was in the 'extremely bullish' territory at the time of writing.

Last week, official data showed that U.S. non-farm employment rose by just 22,000 in August compared with the consensus projections of 75,000 additions. At the same time, the employment rate rose to 4.3%, the highest in nearly four years.

“Consumers are already worried about squeezed spending power from tariffs and are now increasingly concerned about job security. Fed doves will intensify their calls for action,” ING commodities analysts noted.

According to CME Group's FedWatch, 90% traders have priced in a 25 basis point rate cut by the U.S. central bank, with some even projecting a 50-point reduction. So far this year, the Fed has kept the benchmark interest rates steady at the current 4.25%-4.50% levels.

Bullion tends to thrive in a low-interest-rate environment, as investors use it as a hedge against inflation. The U.S. dollar index also declined marginally, making the greenback-priced bullion cheaper for overseas investors.

Gold prices have surged this year on the back of geopolitical tensions and the economic uncertainties caused by U.S. President Donald Trump's tariff policy. The U.S. President's relentless attacks on Federal Reserve Chair Jerome Powell have also raised doubts about the U.S. central bank's independence.

Last month, Trump fired Fed Governor Lisa Cook over alleged mortgage fraud, which Cook has denied. Cook is currently facing a Justice Department investigation, and her fate will soon be decided by a federal court in a judgment that will determine the extent of Trump's executive powers.

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