Gold holds above $4,300 as rate-cut bets build
Bullion extends last week’s 7% surge as weak US employment data, investor positioning and Chinese buying lend support.
Gold prices have remained above $4,300 an ounce for the first time since June, driven by weak US employment data, increased investor positioning, and Chinese central bank purchases. The metal traded at around $4,340 an ounce after surging over 7% last week, staying above its 60-day moving average. Prior to this rally, gold had been hovering just above $4,000 for about a month.
The recent drop in US employment, with 23,000 jobs lost in July, and growing optimism from hedge funds and money managers about the Federal Reserve's potential rate cuts have contributed to the bullish outlook. The Federal Reserve faces a challenging inflation scenario due to geopolitical tensions, such as the ongoing conflict in the Middle East, which adds uncertainty to price pressures.
Additionally, China's central bank increased its gold reserves in July to the highest level since October 2023, providing further support for the precious metal.
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