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Gold rallies above $3,600/oz to a record high as Fed rate-cut bets are firm

Gold surged above $3,600 per ounce for the first-time on Monday. It was a record high as weak U.S. employment data reinforced expectations that the U.S. Federal Reserve would cut interest rates the following week.

As of 2:26 pm EDT (1826 GMT), spot gold was up 1.3% at $3,634.25 an ounce. Bullion reached a new record of $3,646.29.

U.S. gold futures for December delivery settled 0.7% higher at $3,677.40.

Peter Grant, senior metals analyst at Zaner Metals and vice president, believes that the yellow metal will continue to rise in price, reaching $3,700-3,730 within a short time.

The bullion market could be sustained by the continued softening of the labor market and the expectation that Fed rates will continue to fall into early 2026.

The Friday jobs report revealed that U.S. employment growth was slowed dramatically in August. According to CME FedWatch, traders now expect a rate cut of up to a quarter point at the Fed meeting in September.

Low rates reduce the cost of holding bullion that does not yield.

Gold prices have risen 37% this year after 27% growth in 2024. This is due to dollar weakness, central bank accumulations, dovish monetary policies and increased global uncertainty.

China's central banks extended its gold buying streak to 10 consecutive months in August, according to official data released on Sunday.

The benchmark 10-year U.S. Treasury rates, on the other hand, are at their lowest level in five months.

Investors will now be waiting for the U.S. consumer price data and producer prices to come out on Thursday. This information could provide further insight into Fed policy.

Fawad Rasaqzada is a market analyst for City Index and FOREX.com. He said that if the U.S. Dollar and yields continue to fall, the bullish momentum should also continue in gold.

Razaqzada said that if the U.S. data showed surprise resilience in the coming week, gold could correct from its elevated levels.

Silver spot rose 0.8%, reaching its highest level since September 2011 earlier in the session. Platinum rose 0.6% to $1,381.49 and palladium gained a 2.1% increase to $1,132.87.

(source: Reuters)