Quick overview

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An unexpectedly weak US employment report helped gold trade near Friday’s record high, as speculation grew that the Federal Reserve would lower interest rates.

The bullion asset was nearly $20 below its recent peak of $3,600 an ounce despite a late Friday rally of up to 1.5 percent.

Hiring slowed, according to a key US payrolls report, while unemployment rose to its highest level since 2021.

Swap traders increased their bets on rate cuts, currently pricing in nearly three reductions for the rest of this year. Non-yielding XAU/USD has been supported by strong haven demand amid concerns about the future of the US central bank, and lower borrowing costs tend to make it more attractive.

The upcoming revisions for US jobs data on Tuesday and the US producer and consumer inflation reports on Wednesday and Thursday will test the renewed hopes for a rate cut this week. Additionally, traders will watch how the market reacts to Treasury auctions for three, ten, and thirty-year.

Additionally, Trump’s administration took action on Friday to exempt gold bullion and certain other metals from tariffs based on the country.

The agency has officially announced a plan to exempt gold bars from tariffs following a decision by US Customs and Border Protection that surprised traders and caused confusion by stating that bullion would be subject to import taxes weeks earlier

The People’s Bank of China increased its gold holdings in August for the tenth consecutive month, according to data released over the weekend as part of its ongoing efforts to diversify its reserves away from US dollars.