Gold holds above $4,300 per oz as rate-cut bets build 

Gold held above $4,300 per oz. for the first time since June on Monday as weak U.S. employment data, stronger investor positioning and increased Chinese central bank purchases supported bullion. 

The metal traded around $4,340 per oz. after jumping almost 7% last week, remaining above its 60-day moving average. Gold had spent roughly a month hovering just above $4,000 per oz. before the latest rally. 

The move followed an unexpected loss of 23,000 U.S. jobs in July, adding to expectations that the Federal Reserve may have less room to raise interest rates even as inflation remains a concern. 

Hedge funds and money managers increased their bullish bets on bullion last week to the highest level in more than six months, according to the latest Commodity Futures Trading Commission data. 

Rate outlook

The Fed faces an increasingly difficult inflation outlook as the months-long war in the Middle East adds uncertainty to price pressures and the broader economy. 

Gold typically benefits from expectations of lower interest rates because the metal does not pay interest, making it relatively more attractive when yields decline. 

China is also providing support. The country’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 U.S. employment, greater speculative positioning and central bank purchases has strengthened bullion after its prolonged stretch near $4,000 an ounce. 

War pressure 

Gold remains nearly a fifth below the levels recorded before the Iran war began, underscoring the precious metal’s volatile response to the conflict. 

With no resolution to the war in sight, geopolitical uncertainty remains an important influence on bullion alongside the outlook for U.S. inflation and monetary policy. 

The next test is whether those forces can sustain bullion’s renewed rally.