Gold hovered near record levels during Monday's Asian session as investors weighed weak United States labour data, renewed geopolitical tensions, and ongoing central bank demand.
By 3:40 pm AEST (5:40 am GMT), spot gold was little changed at US$3,586.96 per ounce, consolidating after Friday’s surge to an all-time high of $3,600.
Last week's surge of 4% was reinforced by the August jobs report, which showed nonfarm payrolls increased by just 22,000 against forecasts of 75,000, while unemployment climbed to 4.3%, its highest since late 2021.
Adding to the safe-haven appeal, Russia launched its largest air strike of the war on Ukraine over the weekend, killing four people and damaging infrastructure across multiple regions, Ukrainian President Volodymyr Zelenskyy said.
Meanwhile, the People’s Bank of China extended its bullion-buying streak into a 10th straight month in August, further boosting demand for the precious metal.
Looking ahead, investors are expected to reduce long positions ahead of U.S. consumer and producer price index data later this week, which could shape expectations for the scale of Fed easing.
According to the CME Group FedWatch Tool, markets are pricing a 10% probability of a 50 basis point rate cut.
ANZ analysts noted: "Investor demand has also been driven by fears of Fed losing its independence, as President Trump continues to push for more governors who are amenable to his view on monetary policy."
