🔝Gold breaks above $3,600

Gold has climbed more than 5% since the beginning of September, boosted by a weaker dollar.

Excluding a minor price correction on September 4, gold would currently be in the midst of its 10th consecutive session of gains—a streak considered extremely rare in the markets. The precious metal has already risen over 5% this month, with its next major target of $4,000 just over 10% away. The rally is being driven by the ongoing weakness in the US dollar and growing uncertainty surrounding the US economy.

Last Friday's US jobs data not only showed a remarkably low employment gain of 22k, but also included another downward revision to the June figures. The unemployment rate rose to 4.3%, in line with expectations, while wage growth slowed. This combination of data all but guarantees an interest rate cut from the Federal Reserve and paves the way for a new easing cycle. Markets are now pricing in nearly three rate cuts this year, or one at each of the remaining 2025 meetings. Furthermore, the market is discounting a total of approximately 150 basis points of cuts before the easing cycle ends, suggesting the possibility of an additional three rate cuts next year on top of those currently being priced in.

The market is pricing in aggressive rate cuts by the Fed in the coming months. Source: Bloomberg Finance LP

Gold is up almost 1% today, significantly exceeding the $3,600 per ounce level. The next key resistance is near $3,644 per ounce, at the 138.2 retracement. Source: Bloomberg Finance LP, XTB