Gold Hits Record High for Third Straight Day
Gold prices (XAU/USD) hit a new record for the third consecutive day, breaking above US$3,650 per ounce during Tuesday's Asian session. This surge was triggered by the US labor market report (NFP) showing a weakening labor market, reinforcing expectations that the Federal Reserve will cut interest rates at its policy meeting next week. The market is even starting to factor in the possibility of three interest rate cuts by the end of the year.
The prospect of this monetary policy easing has pushed the US dollar to its lowest level since July 28, while increasing inflows into safe-haven assets like gold. Furthermore, political instability in Japan and France has supported demand for the precious metal, which is often viewed as a hedge against global turmoil.
Although gold's upward momentum remains strong, its overbought technical conditions have the potential to limit further gains in the short term. Analysts believe that any correction will likely be temporary and will be viewed as a buying opportunity by investors.
Market attention is now focused on the release of the latest US inflation data, namely the Producer Price Index (PPI) on Wednesday and the Consumer Price Index (CPI) on Thursday. These data results are expected to provide clearer clues regarding the direction of the Fed's interest rate policy and could be a major catalyst for gold's next move.
Key Points:
Gold broke through US$3,650, a record for the third consecutive day.
Expectations of three Fed rate cuts this year were the main driver.
The US dollar weakened to its lowest level since July 28.
Political instability in Japan and France added to the safe-haven sentiment.
Market focus: US inflation data (PPI and CPI) this week.
Source: Bloomberg
