Gold hits new highs as soft jobs data and rate-cut hopes drive demand

Gold (XAUUSD) opened the week with renewed strength, climbing to record levels above $3,600. The move highlights growing market confidence that interest rate cuts are on the way at the next Fed meeting. Softer labor market data, including weak job growth and rising unemployment, has fueled those expectations. Furthermore, geopolitical instability and trade-related uncertainty are keeping demand for safe-haven assets strong. With Treasury yields falling and the US Dollar under pressure, gold is gaining strength on both fundamental and technical fronts.

Gold climbs on policy shift expectations and heightened geopolitical tensions

Gold has started the week with strong upward momentum, reaching new all-time highs above $3,600. The surge reflects growing confidence that the Federal Reserve will cut interest rates at its September policy meeting. Gold is up nearly 38% this year, driven by economic concerns and changing expectations around monetary policy.

The latest employment report has highlighted growing risks to the economic outlook. Specifically, the August Nonfarm Payrolls report showed the US economy added only 22,000 jobs, well below the 75,000 estimate. The unemployment rate climbed to 4.3%, its highest level since 2021. Markets are now firmly expecting a 25 basis point rate cut this month. Furthermore, a growing number of participants are also weighing the possibility of a 50 basis point cut.

Additionally, rising geopolitical tensions and policy uncertainty continue to support gold’s strength. Prime Minister Shigeru Ishiba’s resignation has triggered political instability in Japan, fueling uncertainty in regional financial markets. Meanwhile, trade policy continues to draw attention in the U.S. Treasury Secretary Scott Bessent stated that a potential court ruling could result in up to $1 trillion in refunded tariffs. Furthermore, with Treasury yields falling and the US Dollar weakening, these global uncertainties continue to support gold’s upward momentum.

Gold confirms triangle breakout with $3,900 target now in focus

The gold chart below shows a clear breakout from an ascending triangle pattern that formed over recent months. Notably, the setup was defined by multiple tops near $3,460–$3,475 and higher lows that steadily pushed the price upward. As a result, this formation reflected steady buying interest and narrowing price action, as demand continued to build below key resistance. Over time, the triangle developed between April and early September, forming a well-defined technical base for a potential breakout.

Eventually, gold broke above the horizontal resistance line in September, triggering a clean breakout with strong follow-through. The breakout candle closed well above the triangle ceiling, validating the move and signaling the start of a new bullish phase. Moreover, volume and momentum both expanded during the breakout, adding confirmation to the price action. Furthermore, projecting the triangle’s height from the breakout point gives a measured target close to $3,900. This projection outlines the next potential leg of the rally.

Since the breakout, gold has continued to climb steadily, showing no signs of exhaustion. Currently, the price is holding above the former resistance zone, which has turned into key support around $3,475. As long as this level holds, the bullish structure remains intact. Moreover, the absence of significant pullbacks suggests strong conviction among buyers. With strong momentum and a clear path ahead, gold is well-positioned to approach the $3,900 level.

Gold outlook: Bullish momentum holds as markets await inflation data

Gold remains firmly in an uptrend, supported by a combination of macroeconomic weakness, policy uncertainty, and a decisive technical breakout. The confirmed move above the ascending triangle pattern has strengthened bullish momentum. Meanwhile, soft labor data and falling yields continue to reinforce expectations of Fed rate cuts. Gold’s ability to hold above key support, combined with persistent safe-haven demand, suggests a continued move toward the $3,900 level. Markets now await inflation data, which could influence gold’s short-term direction, but current price action continues to support the bullish outlook.

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