Gold prices climbed 0.4% to $3,287.29 per ounce on Monday, buoyed by a softer U.S. dollar that slipped to its weakest level in over three years.
The precious metal has gained about 5.3% so far this quarter as investors position for expected Federal Reserve rate cuts, currently anticipated to begin around September.
Market attention is focused on upcoming U.S. labor data that could influence the Fed’s outlook on interest rates. Key releases this week include Wednesday’s ADP private payrolls report and Thursday’s nonfarm payrolls, both of which could shape expectations for monetary policy.
Comments from former President Trump expressing a preference for Federal Reserve leadership that favors lower rates have also supported gold, as investors weigh the potential for a more accommodative policy stance alongside economic indicators and central bank guidance.
Analysts note that gold typically benefits when the dollar weakens and real yields fall, since lower yields reduce the opportunity cost of holding non-yielding assets like bullion. With traders pricing in a higher likelihood of Fed easing, demand for safe-haven and inflation-hedge assets has risen.
However, market watchers caution that the path for gold will remain sensitive to incoming data and any shifts in Fed communications. Stronger-than-expected payroll numbers or signs of persistent inflation could temper expectations for rate cuts and weigh on prices. Conversely, softer employment or inflation readings would likely reinforce the case for easing and support further gains in bullion.
For now, the combination of a weakening dollar, elevated expectations for policy easing, and supportive geopolitical and political headlines has helped propel gold to its recent gains, while upcoming economic releases will be closely monitored for signals about the timing and scale of any Fed easing.