Gold Rallies Above $4,300 as Rate-Cut Bets Intensify

Gold prices have surpassed $4,300 an ounce for the first time since June, buoyed by weak US employment data, increased investor bets, and higher Chinese central bank purchases. The precious metal traded around $4,340 an ounce after jumping nearly 7% last week, remaining above its 60-day moving average.

The unexpected loss of 23,000 US jobs in July has added to expectations that the Federal Reserve may have less room to raise interest rates, even as inflation remains a concern. This is good news for gold, which typically benefits from expectations of lower interest rates because it does not pay interest, making it relatively more attractive when yields decline.

China's central bank increased its gold reserves in July by the most since October 2023, adding another source of demand for the precious metal. The combination of weaker US employment, greater speculative positioning, and central bank purchases has strengthened bullion after its prolonged stretch near $4,000 an ounce.