Gold's rally extended beyond the $3,600 level for the first time on Monday after soft US jobs data cemented expectations of an interest rate cut by the US Federal Reserve next week, reports Reuters.
Spot gold rose 0.9 per cent to $3,617.79 per ounce at 1209 GMT after hitting a record high of $3,622.07 earlier in the session.
Bullion has surged about 37 per cent so far this year, building on a 27 per cent gain in 2024, driven by a weaker dollar, strong central bank buying, a soft monetary policy backdrop, and geopolitical and economic uncertainty. US gold futures for December delivery were unchanged at $3,657.20.
US job growth weakened sharply in August, data showed on Friday, and the unemployment rate rose to a nearly four-year high of 4.3 per cent, confirming a softer labour market and sealing the case for a Fed rate cut next week.
"(Rate cut bets) are boosting the demand of gold. Moreover, the overall geopolitical scenario is extremely uncertain ... we should consider that a significant part of the demand is also coming from central bank buying," said Carlo Alberto De Casa, an external analyst at banking group Swissquote.
Traders have priced in a 88 per cent chance of a 25-bp cut next week, 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.
"We look for gold to rise to $3,700/oz by mid next year," said UBS analyst Giovanni Staunovo.
Benchmark 10-year US Treasury yields, meanwhile, were near their lowest in five months.
Focus now shifts to US Producer Price Index data on Wednesday and the Consumer Price Index on Thursday, that could offer more clarity on the size of the Fed's expected rate cut.
