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Gold Extends Record Run With $2,200 in Sight After US Jobs Data

Gold Extends Record Run With $2,200 in Sight After US Jobs Data
(Photo: Chalinee Thirasupa / Bloomberg via Getty Images)

Gold extended its rally to a fresh record high after a key US jobs report bolstered expectations that the Federal Reserve will soon cut interest rates.

The precious metal climbed as much as 1.2% to $2,185.50 an ounce, rising for an eighth straight day in an advance that has been fueled by hopes for rate cuts, central bank buying and renewed investor interest. Yet the scale and speed of the recent ascent has caught many seasoned market observers off-guard, with no clear catalyst for the rally beyond long-standing pillars of support.

Data Friday showed US employment surpassed expectations in February while wage gains moderated, adding to signs of healthy economic growth and softer inflation.

The Federal Reserve’s long-anticipated pivot to looser monetary policy is widely expected to boost gold’s appeal compared with yield-bearing assets like bonds. Persistent geopolitical tensions in the Middle East and Ukraine have bolstered the precious metal’s role as a haven asset, while central banks, particularly the People’s Bank of China, continue to add to their holdings.

Spot Gold Rises To New Record | Bullion has risen for eight consecutive sessions

Friday’s US jobs report showed nonfarm payrolls advanced 275,000 last month following a combined 167,000 downward revision to the prior two months. The unemployment rate rose to 3.9%.

Gold Just Notched Another Record: Here’s What to Watch Next

The frenzied nature of this month’s gains has led some analysts to conclude that major new buyers are stepping into the market, such as investment funds making bold bets on the global macroeconomic outlook. The broad question is what might fuel the next leg of the rally.

“We expect gold prices to trade higher this year as safe-haven demand continues to be supportive amid geopolitical uncertainty with the ongoing wars and the upcoming US election,” ING Groep commodities strategist Ewa Manthey said in a note. “Gold tends to become more attractive in times of instability when investors pile into safe-haven assets as a hedge against the economic climate, geopolitical tensions or inflation.”

Spot gold was up 0.5% at $2,170.96 an ounce as of 9:05 a.m. in New York. Silver edged up, platinum was little changed and palladium gained.

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