Gold extended its rally during Monday's Asian deals, pushing toward record levels as thin trading conditions, revived safe-haven flows, and mounting expectations of Federal Reserve rate cuts drove demand.
by 3:50 pm AEST (5:50 am GMT), spot gold was up $33.95 or 1%, reaching US$3,481.19 per ounce, and rising for a fifth consecutive session.
The gains left the precious metal at its highest level in five months and within striking distance of its all-time peak near $3,500.
With United States and Canadian markets closed for the Labor Day holiday, price moves were accentuated by thin liquidity.
The rally was bolstered by weakness in equity markets across Asia, particularly Japan’s Nikkei 225, which slid sharply following last week’s technology-led sell-off on Wall Street.
Trade-related uncertainty added to the momentum. A U.S. court ruled on Friday that President Donald Trump’s unilateral global tariffs were largely illegal, stoking investor caution.
However, U.S. Trade Representative Jamieson Greer signalled in a Fox News interview on Sunday that Washington would continue negotiating with trade partners despite the ruling.
Economic data also supported bullion. The RatingDog Manufacturing PMI for China unexpectedly rose to 50.5 in August, beating estimates of 49.5 and marking an expansion after July’s 49.5 reading.
The surprise lift in Chinese factory activity added to optimism about resilience in Asia’s largest economy.
Meanwhile, expectations of looser U.S. monetary policy have underpinned gold’s upward momentum. Markets are now pricing in a roughly 87.6% probability of the Federal Reserve cutting rates this month, according to the CME Group FedWatch Tool.
The Fed’s preferred inflation gauge, the core PCE price index, released on Friday, came in line with estimates, reinforcing dovish sentiment.
Attention now turns to key U.S. labour market data due later this week, which investors see as pivotal in shaping the timing and scale of forthcoming Fed rate cuts.
