Onome Amuge
Gold soared to fresh record highs on Wednesday, buoyed by signs of a cooling US labour market that strengthened expectations of a Federal Reserve interest rate cut later this month, while persistent geopolitical and economic uncertainties underpinned safe-haven demand.
Spot gold climbed 0.9 per cent to $3,562.80 an ounce after briefly touching an all-time high of $3,565.57. US gold futures rose 1 per cent to $3,627.40.
The rally gathered pace after the US Labor Department reported job openings fell more sharply than forecast in July, with hiring subdued, underscoring a softening labour market. Traders now assign a 98 per cent probability that the Fed will lower rates by 25 basis points at its September 16-17 policy meeting, up from 92 per cent before the data, according to CME Group’s FedWatch tool.
“Gold was already trading in record territory before the release, but the softer numbers helped keep the precious metal buoyed, with the next upside target eyed at $3,600 an ounce,” said Fawad Razaqzada, market analyst at City Index and Forex.com.
Attention now shifts to further US data, including jobless claims and the ADP employment report on Thursday, followed by Friday’s closely watched non-farm payrolls. Fed Governor Christopher Waller reiterated his call for a rate cut, while noting the pace of easing after September would depend on subsequent economic conditions.
The rally has also been fuelled by mounting political tensions around the central bank. Fed Governor Lisa Cook this week pushed back against President Donald Trump’s effort to remove her, while the former president has renewed criticism of Fed chair Jay Powell for holding rates steady earlier this year.
“Growing concerns over the independence of the US central bank are further undermining trust in dollar-denominated assets and pushing investors toward gold,” traders at Heraeus Metals said.
Gold, which thrives in a low-yield environment and during periods of uncertainty, has been further supported by sluggish eurozone growth and renewed trade policy frictions, with Trump expected to ask the US Supreme Court to uphold his sweeping import tariffs.
“Gold’s rally has room to run, with short to medium-term targets around $3,600 to $3,800, and the breakout pattern suggesting $4,000 could be within reach by late first quarter next year,” said Peter Grant, vice-president and senior metals strategist at Zaner Metals.
Other precious metals also benefited from the momentum: spot silver rose 0.8 per cent to $41.22, its highest level since 2011, while platinum added 2.1 per cent to $1,432.12 and palladium climbed 1.6 per cent to $1,152.68.
