Gold Increases As Rate Cut Expectations Solidify Further

(RTTNews) - Gold prices jumped on Monday, extending previous session's gains, with last week's weak-than-expected US jobs data continuing to cement expectations for a rate cut by the Federal Reserve.

Front Month Comex Gold for September delivery advanced by $24.90 (or 0.69%) to $3,638.10 per troy ounce today. Notably, today's settlement value is a new record closing high for gold.

Front Month Comex Silver for September delivery gained by 35.20 cents (or 0.86%) to $41.426 per troy ounce today. today's settlement value is the second highest for Silver this year.

Data on the US jobs market released last Friday indicated a weakening labor market, increasing the previously held expectations for a rate cut.

According to CME Group's FedWatch Tool, investors are now betting on an 88.4% chance of a 25-basis-point interest rate cut and an 11.6% chance of a 50-basis-point interest rate cut in September.

With the unemployment rate increasing to a nearly four-year high of 4.3%, poor jobs data indicating slowing jobs growth (though not a collapse) has raised concerns about a slowdown in the world's largest economy.

Major central banks globally are continuing with their accumulation of gold.

China's gold reserves stood at 74.02 million troy ounces at the end of August, up from 73.96 million at the end of July. They were valued at approximately $253.84 billion, up from $243.99 billion at the end of the previous month.

On August 29, a federal appeals court ruled that US President Donald Trump's reciprocal tariffs were "illegal." The Trump administration is appealing the verdict in the US Supreme Court.

Even as the legal battle is underway, US Treasury Secretary Scott Bessent has admitted that if the Supreme Court upholds the appeals court judgment, the nation has to refund roughly half of the collected tariffs which would be terrible for the treasury. The judgment has frozen the already-complicated trade scenario.

This week, reports on producer and consumer price inflation along with a preliminary reading on sentiment survey could shed more light on the current economic situation.

Traders feel that despite a slowdown in physical gold purchases by consumers in China (as well as India) due to high prices, central banks are on a gold-acquisition spree, distancing from US Dollars due to lingering trade and geopolitical uncertainties.

Notably, bullion has surged about 38% so far this year.