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- Gold prices smash through $3,600 as bullish momentum dominates.
- Weak US jobs data cements Fed rate-cut expectations, sending gold higher.
- CPI data this week could decide whether the rally stretches further.
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Another day, another record for gold – and it’s now comfortably trading above the $3,600 mark. The metal’s remarkable run shows no signs of cooling off, with last week’s weaker US jobs report giving traders even more conviction that the Federal Reserve will deliver a rate cut next week.
Today’s session was another example of momentum-driven trading. Gold sliced through the $3,600 ceiling where it had stalled on Friday, adding another $15 to notch up yet another all-time high. Traders are clearly reluctant to take profits in a big way, and few are brave enough to step in front of this trend.
It’s worth noting that gold spent more than 100 days consolidating after April’s $3,500 high before finally breaking out at the start of September – so the technical picture still looks very constructive. For now, any dip is likely to attract eager buyers until something truly changes on the fundamental front.
What’s Fuelling the Relentless Rally?
A big part of gold’s strength comes down to mounting expectations for US interest rate cuts. The run of softer labor market data has only reinforced the case for looser monetary policy. On top of that, sustained central bank buying continues to underpin demand.
Another major driver is the shift away from US Treasuries towards gold. This trend highlights growing investor skepticism over America’s fiscal position, with debt-to-GDP rising and questions lingering about the Fed’s independence. Unless Trump’s tax and spending plans manage to engineer a genuine economic rebound, that debt ratio is only heading higher – and bond markets will demand a higher premium to lend to the US government.
Against this backdrop, it’s hard to build a bearish case for gold. The chart still screams momentum, and the fundamental picture remains supportive.
Technical Analysis and Trade Ideas
From a technical perspective, the trend is still intact with its series of higher highs and higher lows. Until that structure breaks, the bias remains to buy the dips.
The first level of interest sits at $3,600, which now acts as immediate support. Below that, $3,564 (Thursday’s high) and $3,530 are the next areas to watch, with $3,500 – April’s high – a possible retest level if things really pull back.
On the upside, round numbers such as $3,700 are the next obvious targets, while Fibonacci projections – particularly the 161.8% extension at $3,735 – could provide the next milestone for bulls.
All Eyes on US CPI
The focus now shifts to this week’s US CPI numbers, the last big data point before the Fed meeting. A softer print could see markets start pricing in the possibility of a larger 50-bps rate cut, though in reality such a move still looks unlikely.
Still, if US data keeps weakening, gold should continue to benefit as yields and the dollar come under further pressure. Conversely, any upside surprise in economic data could finally spark a corrective pullback – but for now, the bulls remain firmly in control.
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Disclaimer: This article is written for informational purposes only; it does not constitute a solicitation, offer, advice, counsel or recommendation to invest as such it is not intended to incentivize the purchase of assets in any way. I would like to remind you that any type of asset, is evaluated from multiple perspectives and is highly risky and therefore, any investment decision and the associated risk remains with the investor.