Gold News: Gold Hovers Near Record High as Traders Position for Fed Rate Decision

Soft US Jobs Data Fuels Bullish Case Into Fed Decision

Gold ended the week with a strong bullish tone, closing at $3,586.55 after briefly tagging a new all-time high at $3,600.21. The move was driven by sharply weaker U.S. labor data that reinforced expectations of a Federal Reserve rate cut at the upcoming September 17 FOMC meeting. With bond yields and the dollar under pressure, rate-sensitive assets like gold remain well supported by macro fundamentals.

US Labor Market Shows Clear Signs of Weakness

The August non-farm payrolls report came in far below expectations, with just 22,000 jobs added versus forecasts for 75,000. The unemployment rate rose to 4.3%, the highest in over a year. Earlier in the week, ADP private payrolls also missed, and weekly jobless claims increased to 237,000. Combined, the data paint a picture of a labor market losing steam, reinforcing the case for rate cuts.

Market pricing now shows a 90% probability of a 25-basis-point cut in September, with some bets even factoring in a larger move. Fed commentary has turned more cautious on employment conditions, adding weight to the dovish pivot.

Yields Slide as Real Rates Fall

Benchmark Treasury yields dropped sharply after the data. The 10-year yield fell to 4.076%, and the 2-year dropped to 3.509%, marking a five-month low. Lower real yields reduce the opportunity cost of holding gold, helping drive inflows from institutional accounts and hedgers.

Dollar Declines Further as Stagflation Concerns Rise

The U.S. Dollar Index closed the week at 97.767, down 0.48%. It lost ground across the board, including nearly 1% against the Swiss franc. A mix of weakening growth signals and political interference in Fed policy discussions has put the dollar under pressure. Traders are increasingly discussing stagflation risk as inflation remains sticky while growth slows—conditions that historically support gold.

Gold Prices Projection: Bullish Outlook Holds Above Minor Support

Gold remains in a clear uptrend. Minor support is located at the former top of $3,500.20. The trend is currently being controlled by the main swing bottom at $3,311.56 and the 52-week moving average at $3,005.17. As long as those levels remain unchallenged, pullbacks are expected to attract buyers.

With the Fed decision just ahead and rate cut expectations elevated, the short-term gold prices forecast remains bullish.

More Information in our Economic Calendar.