Gold prices rose in European trading on Tuesday, extending gains for the sixth consecutive session and surpassing the key psychological level of $3,500 an ounce for the first time in history. The precious metal’s rally to new record highs in latest intraday trading was capped by a rebound in US dollar levels.
With strong current expectations that the Federal Reserve will cut interest rates at its September meeting, global financial markets await more key US labor market data throughout this week.
Price Overview
• Gold prices today: gold rose by 0.95% to $3,508.77, the highest on record, from the opening level of $3,476.46, with a low at $3,474.57.
• At Monday’s settlement, gold gained 0.8%, marking a fifth consecutive daily rise, supported by a weaker dollar and lower US Treasury yields.
US Dollar
The US dollar index rose on Tuesday by about 0.2%, on track for its first gain in six sessions, recovering from a five-week low of 97.54 points, reflecting a rebound in the greenback against a basket of global currencies.
The recovery in dollar levels came on the back of bargain-buying from lower levels, alongside reluctance to build new short positions ahead of a series of key US economic data releases.
US Treasury Secretary Scott Bessent said on Monday that the Federal Reserve is independent and should remain so, but added that it has “made many mistakes,” defending President Trump’s right to dismiss Fed Governor Lisa Cook over alleged mortgage fraud.
US Interest Rates
• In a social media post on Friday, San Francisco Fed President Mary Daly reaffirmed her support for rate cuts, citing risks threatening the labor market.
• According to CME Group’s FedWatch tool: market pricing currently places the probability of a 25-basis-point rate cut in September at 90%, with a 10% probability of no change.
• Market pricing for a 25-basis-point rate cut in October is currently stable at 95%, with a 5% probability of no change.
• To reprice September expectations, markets now await a series of key US labor market data: Wednesday’s JOLTS job openings for July, Thursday’s US private sector employment and weekly jobless claims, and Friday’s nonfarm payrolls report for August.
Outlook for Gold
Kyle Rodda, market analyst at Capital.com, said that a weaker economic outlook and expectations of US interest rate cuts continue to support precious metals.
Rodda added: among other factors supporting gold prices is a deepening crisis of confidence in US financial assets due to President Donald Trump’s attack on the Federal Reserve.
SPDR Fund
Gold holdings with SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, were unchanged yesterday, with the total remaining at 977.68 metric tonnes, the highest since August 29, 2022.
