Gold traded at an all-time high on Monday after last week’s gains as weak US jobs data reinforced expectations of monetary policy easing.
Friday’s nonfarm payrolls showed fewer jobs added than anticipated and unemployment at its highest level since 2021, reinforcing the case for a September rate cut.
Traders fully expect a 25-basis-point move in September and additional rate cuts, keeping the policy backdrop highly supportive for the bullion.
Persistent political interference in the Fed has heightened concerns over central bank independence, dragging investor confidence down and benefiting safe-haven assets like gold. Attention now turns to Thursday’s inflation report, which could determine the size of the Fed’s next step.
ETF flows added further confirmation of investor appetite. Gold-backed ETFs registered net inflows of nearly 35 tonnes in the week to August 29, the largest since April, driven by allocations in North America and Europe. At the same time, the People’s Bank of China expanded its holdings for a 10th consecutive month, underscoring strong institutional demand.
At the same time, geopolitical tensions continued to underpin safe-haven demand. Russia launched its largest aerial bombardment of Ukraine since the start of the conflict, while Israeli strikes across Gaza continued.
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