Onome Amuge
Gold futures vaulted to a fresh all-time high on Monday, breaking through the $3,550 mark, as mounting bets on a Federal Reserve rate cut and renewed political uncertainty in Washington underpinned demand for the precious metal.
The most actively traded contract rose as much as 1.2 per cent to $3,557 per troy ounce in thin holiday trade, before paring gains to settle around $3,476. The rally extended a months-long advance that has made bullion one of the best-performing assets of 2025, buoyed by expectations of looser monetary policy and its role as a hedge against financial instability.
The move higher came despite subdued trading volumes, with US markets closed for the Labor Day holiday. “Gold has broken higher during the trading session on Monday to finally break out a bit,” said Christopher Lewis, a senior analyst at FXEmpire. “The one thing I’d be a little bit concerned about is the fact that it happened during the holiday. Regardless, I do think this eventually goes much higher, and short-term pullbacks end up being buying opportunities,” he added.
Investors are now focused on the release of August non-farm payrolls data later this week, seen as a crucial gauge of whether the Fed will cut rates at its September meeting. A run of weaker labour market indicators has already shifted market pricing decisively toward an easing cycle, a move that would lower the opportunity cost of holding non-yielding assets such as gold.
Adding to the bullish momentum were political developments in Washington. US President Donald Trump’s abrupt dismissal of Federal Reserve governor Lisa Cook has raised questions about the central bank’s independence, further fuelling safe-haven demand. Traders also cited last week’s US Court of Appeals ruling, which found that many tariffs imposed during Trump’s first term were unlawful, as a source of renewed policy uncertainty.
Technical analysts noted that momentum indicators remained strong, with the Relative Strength Index approaching the 70 threshold but still shy of levels considered heavily overbought. Market watchers identified resistance at $3,550 and $3,600, while support levels were pegged at $3,452,the June 16 high, and $3,438, the July 23 peak.
Gold has already gained more than 18 per cent this year, outpacing equities and government bonds as investors reposition for a world of lower interest rates and heightened geopolitical risk. The metal has also benefited from steady purchases by central banks, particularly in emerging markets, which have sought to diversify reserves away from the US dollar.
Still, some analysts urged caution after the sharp rally. “Any pullback toward the $3,500 level opens up the possibility of a little bit of market memory. Those who have missed the breakout or were short may be forced to adjust positions accordingly,”said Lewis.
