Gold Rallies as Rate Hike Expectations Plummet
Gold prices reached their highest level in more than two months on Tuesday, following a weaker-than-expected US jobs report. Spot gold rose around 0.5% to trade near $4,400 an ounce.
The rally began after the July jobs report showed the economy shed roughly 23,000 positions, prompting markets to scale back expectations of a Federal Reserve rate hike next month.
Lower interest rate expectations tend to support gold prices, as the metal offers no yield and becomes more attractive when rates are lower or expected to fall.
The Fed left rates unchanged at its July meeting, with three officials dissenting in favour of raising them.
This week's inflation data, including US consumer price data due Wednesday and producer price data on Thursday, will be crucial in determining the durability of gold's rally.