Gold prices extended their record-breaking run in Asian trade on Tuesday, supported by a weaker dollar, falling bond yields, and mounting expectations for a Federal Reserve rate cut this month.
Spot gold rose $18.72, or 0.5%, to US$3,654.78 per ounce by 3:15 pm AEST (5:15 am GMT).
The move higher followed last week’s weak U.S. August jobs report, which reinforced bets on Fed easing.
According to the CME Group FedWatch Tool, traders now see an 88.3% chance of a 25-basis-point cut and an 11.7% probability of a larger half-point cut at the September meeting.
Lower policy-rate expectations have driven real yields to five-month lows and pushed the dollar index to its weakest level in nearly seven weeks, enhancing bullion’s appeal.
Beyond the rates narrative, structural demand has added further support. The People’s Bank of China was reported to have continued adding to its gold reserves in August, while geopolitical tensions have reinforced the metal’s role as a safe-haven hedge.
This persistent bid has helped gold absorb profit-taking pressure in recent sessions.
Looking ahead, the European Central Bank is widely expected to hold interest rates steady at its meeting on Thursday.
In the U.S., investors are awaiting August's producer price and consumer price indexes for fresh clues on the Fed’s policy trajectory.
