Amanze Chinonye
Gold prices (XAU/USD) edged higher in early Asian trading on Monday, climbing toward $3,590 per ounce and nearing record highs. The rally comes after weaker U.S. jobs data reinforced expectations that the Federal Reserve will cut interest rates this month, making the non-yielding precious metal more attractive.
The latest U.S. nonfarm payroll report showed just 22,000 jobs were created in August, with unemployment rising to its highest level since 2021. Analysts say the figures highlight a slowing labor market, signaling weaker economic activity in the world’s largest economy. For investors, that means lower returns on cash assets and stronger incentives to shift into safe havens like gold.
Join our WhatsApp ChannelMarkets are now pricing in an 84% chance of a 25-basis-point Fed rate cut at the September 17 policy meeting, with a 16% likelihood of a deeper 50-basis-point reduction. Such moves would reduce the opportunity cost of holding gold, which does not generate yield but gains value when interest rates fall.
“Gold’s rally is not just about the weak U.S. jobs numbers it’s about what they mean for Fed policy and investor strategy going forward,” Rania an Xs analyst told Prime Business Africa. “If rate cuts materialize, demand for gold as both a hedge and a store of value is likely to intensify.”
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Adding to the bullish momentum, the People’s Bank of China expanded its gold reserves for a tenth consecutive month in August, raising holdings to 74.02 million ounces. This steady accumulation by central banks underlines gold’s strategic role in diversifying reserves away from the dollar amid global economic uncertainty.
Still, traders are watching upcoming U.S. inflation data, which could shape Fed policy and shift gold’s direction. A stronger-than-expected print could lift the dollar and weigh on gold, while weaker data would likely reinforce the upward trend.
From a technical standpoint, gold continues to post higher highs and higher lows, though analysts warn of possible short-term pullbacks. The first support zone sits around $3,500, with deeper support between $3,420 and $3,406. On the upside, a clear break above $3,600 could pave the way toward $3,660 and potentially $3,700.
For investors, gold’s climb signals more than a temporary safe-haven rush. It reflects a fundamental shift in expectations around U.S. monetary policy, with up to three rate cuts forecast by year-end. As central banks continue buying bullion, gold’s resilience makes it a strategic asset for hedging against both inflation and financial market volatility.
Support Levels: $3,500 – $3,420 – $3,406
Resistance Levels: $3,600 – $3,660 – $3,700
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