Spot Gold Tops $3,600 Per Ounce Again to Hit Fresh Record High on US Rate-Cut Prospects

Gold rose past a key $3,600 level, bolstered by mounting expectations of a U.S. Federal Reserve rate cut this month following a weaker-than-expected jobs report last week.

"The main driver is U.S. jobs data and the expectations now that the Fed could cut by 50 basis points in September. It's a marginal chance but a material shift from before the jobs figures," Capital.com financial market analyst Kyle Rodda said.

U.S. job growth weakened sharply in August, and the unemployment rate increased to a nearly four-year high of 4.3%, confirming that labor market conditions were softening and sealing the case for a Fed rate cut next week.

Traders have fully priced in a 25-bp cut this month, with an 8% chance of a jumbo 50-bp rate cut, according to the CME FedWatch tool.

Lower interest rates decrease the opportunity cost of holding non-yielding bullion and weigh on the dollar, making gold cheaper for investors holding other currencies. USD/

Focus now shifts to the U.S. inflation report on Thursday that could offer more clarity on the size of the Fed's expected rate cut.

Bullion has surged 37% so far this year after a 27% gain in 2024, driven by the dollar's weakness, central bank buying, a softening monetary policy backdrop, and wider geopolitical and economic uncertainty.

China's central bank added gold to its reserves in August, extending purchases of bullion into a 10th straight month.