Gold extended its rally on Monday, supported by a softer U.S. dollar and lower Treasury yields, as investors positioned cautiously ahead of crucial U.S. employment data that could shape the Federal Reserve’s next policy move. Silver steadied after last week’s record-breaking surge.
Spot gold rose 0.4% to $4,320.65 per ounce by 0319 GMT, taking year-to-date gains to around 64%. U.S. gold futures advanced 0.6% to $4,354.00.
The dollar hovered near a two-month low, boosting gold’s appeal for overseas buyers, while benchmark 10-year U.S. Treasury yields edged lower.
“Gold is likely to remain well bid into U.S. non-farm payrolls, as evidence of labour market slack would keep front-end yields capped and the dollar weak, supporting a push toward $4,380–$4,440 after a firm rebound from the $4,243 support zone,” said Kelvin Wong, senior market analyst at OANDA.
Markets remain focused on the Fed’s policy outlook after the central bank delivered a 25-basis-point rate cut last week in a rare split decision, while signalling a potential pause amid sticky inflation and uncertainty over the labour market. Two dissenting Fed officials warned inflation remains too high to justify further easing.
Investors are currently pricing in two rate cuts next year, with this week’s U.S. jobs report seen as a critical test of those expectations. Non-yielding assets such as gold typically benefit in a lower interest-rate environment.
Meanwhile, ANZ highlighted India’s move to allow pension funds to invest in gold and silver ETFs as a potential boost to institutional participation. “Such regulation can boost confidence and strengthen investor sentiment, supporting higher allocations across portfolios,” the bank said.
Spot silver rose 0.8% to $62.48 per ounce, after hitting a record high of $64.65 on Friday before retreating. Despite gains of 115% year to date, ANZ cautioned on downside risks, citing stretched valuations versus gold and the potential for fund rotation.
Spot platinum slipped 0.2% to $1,741.82, while palladium edged 0.1% higher to $1,502.29 per ounce.
