Gold prices surged by more than 1% to a four-month high, with the market focusing on the historical high of 3,500.
2025-09-01 14:46:18
Gold prices have successfully escaped the summer downturn, rising strongly, reaching new record highs on both the weekly and monthly charts. Spot gold continued its upward trend during the Asian and European trading sessions on Monday (September 1st), rising by over 1% to $3,489.78 per ounce, a new high since April 22nd and approaching the key all-time high near the $3,500 mark.
Michelle Schneider, chief strategist at MarketGauge, said her gold buy signal was officially triggered last week based on recent dovish comments from Federal Reserve Chairman Jerome Powell.
Powell stated at the Jackson Hole symposium that shifting economic risks may require corresponding adjustments to monetary policy. Schneider's interpretation: "His speech suggests the Fed is no longer wedded to its 2% inflation target, but is instead paying closer attention to signs of an economic slowdown and a weakening labor market."
This policy shift was confirmed in data released last Friday (August 29th) - inflation rebounded as expected. The US Commerce Department reported that the Fed's preferred inflation measure, the core personal consumption expenditures (PCE) price index, which excludes food and energy, rose 2.9% in the 12 months ending in July.
Analysts believe that geopolitical uncertainty will continue to support gold prices. The ongoing conflict between President Trump and the Federal Reserve is shaking the dollar's status as a reserve currency, increasing gold's safe-haven appeal .
It's worth noting that Trump has recently shifted his focus of pressure from Powell to other members of the Federal Reserve Board. He has attempted to exclude Governor Lisa Cook from monetary policy decisions, citing misrepresentations in mortgage applications from several years ago. Although Cook hasn't been formally fired, analysts believe the Fed's independence has been substantially undermined.
Despite rising inflation, the market still highly expects the Federal Reserve to cut interest rates next month . Chris Zaccarelli, chief investment officer at Northlight Asset Management, said, "The latest inflation data won't change the Fed's path for rate cuts. While there will be two inflation reports, the Producer Price Index (PPI) and Consumer Price Index (CPI), released before the September meeting, a 25 basis point rate cut is almost certain unless there's a significant jump in the figures."
Key technical resistance levels are under scrutiny
Philip Streible, chief market strategist at Blue Line Futures , is optimistic about the short-term trend of gold prices, but at the same time emphasizes the need to observe whether gold prices can hold the key level of $3,500 per ounce .
On the downside, the psychological integer level of 3450 provides short-term support.
Streible pointed out that the trend of precious metals is clear: " The rise in gold this time is because the market smells the smell of stagflation ."
The 14-day relative strength index (RSI) has risen significantly, significantly above the midline level, suggesting strong subsequent short-term bullish momentum.
(Spot gold daily chart, source: Yihuitong)
Non-farm payroll data becomes a key indicator of future market conditions
Looking ahead, Friday's non-farm payroll data will be a key factor influencing gold prices . Analysts generally believe that a weak job market performance will reinforce expectations of an easing Fed policy, further pushing up gold prices .
"If August employment data continues to show weak hiring and a loosening of the labor market, a September rate cut will become a foregone conclusion," Bill Adams, chief economist at Comerica Bank, said in a report. "Our forecast is that non-farm payrolls will increase by 45,000 in August and the unemployment rate will remain at 4.2%."
"Trump has taken control of Fed policy, which means lower interest rates and higher gold prices are inevitable," said Naim Aslam, chief investment officer at Zaye Capital Markets.
Chantelle Sivan, head of research at Capitalight, believes that the conflict between Trump and the Fed will continue to weaken the international status of the US dollar. Against this background, the room for gold prices to rise is immeasurable, and it is only a matter of time before gold hits a record high.
The logic behind institutions' bullish outlook on gold
Schroder analysts reiterated their bullish view on gold in their market report, saying that in the current environment of high policy volatility, a fragile fiscal environment, and increased uncertainty among investors about the long-term role of US government bonds and the US dollar, gold is a valuable diversification investment tool and its role as "portfolio insurance" remains valid .
While Schroders continues to believe that the probability of a U.S. recession in the medium term is low, they also caution that the "near-perfect macro backdrop" currently priced in by the market (i.e., resilient growth and stable inflation) is more likely to disappoint in the coming months and investors may be underestimating the risks on inflation and growth.
Current situation in the gold market
Gold faced some difficult headwinds in the second quarter, as the economy initially appeared to be able to withstand higher tariffs and a changing labor market (partly due to stricter immigration controls), but disappointing July jobs data (including significant downward revisions to May and June) significantly changed market sentiment.
Luke suggested that the key question now is to what extent the market has digested the "bad news" given that gold prices have risen nearly 30% since the beginning of the year.
Although investment demand grew at its fastest pace since 2020 in the first half of the year, Luke believes there is still room for demand to grow in the second half of the year. He points out that quarterly total investment demand remains within the post-2010 range, and his long-term view is that investment demand will grow meaningfully throughout the cycle, far exceeding previous total tonnage peaks .
Luke specifically expects Western demand in North America and Europe to catch up to record investment levels in Asia. He noted that the contrast between East and West markets remains significant: total ETF flows in the US and Europe have been low compared to past cycles, and a significant portion of global ETF growth in April this year came from China. He believes the market is still far from the anticipated "true global bid for gold."
At 14:20 Beijing time, spot gold was trading at 3486.71.
Michelle Schneider, chief strategist at MarketGauge, said her gold buy signal was officially triggered last week based on recent dovish comments from Federal Reserve Chairman Jerome Powell.
Inflation data rebounded, but expectations of rate cuts remained unchanged
Powell stated at the Jackson Hole symposium that shifting economic risks may require corresponding adjustments to monetary policy. Schneider's interpretation: "His speech suggests the Fed is no longer wedded to its 2% inflation target, but is instead paying closer attention to signs of an economic slowdown and a weakening labor market."
This policy shift was confirmed in data released last Friday (August 29th) - inflation rebounded as expected. The US Commerce Department reported that the Fed's preferred inflation measure, the core personal consumption expenditures (PCE) price index, which excludes food and energy, rose 2.9% in the 12 months ending in July.
Analysts believe that geopolitical uncertainty will continue to support gold prices. The ongoing conflict between President Trump and the Federal Reserve is shaking the dollar's status as a reserve currency, increasing gold's safe-haven appeal .
It's worth noting that Trump has recently shifted his focus of pressure from Powell to other members of the Federal Reserve Board. He has attempted to exclude Governor Lisa Cook from monetary policy decisions, citing misrepresentations in mortgage applications from several years ago. Although Cook hasn't been formally fired, analysts believe the Fed's independence has been substantially undermined.
Despite rising inflation, the market still highly expects the Federal Reserve to cut interest rates next month . Chris Zaccarelli, chief investment officer at Northlight Asset Management, said, "The latest inflation data won't change the Fed's path for rate cuts. While there will be two inflation reports, the Producer Price Index (PPI) and Consumer Price Index (CPI), released before the September meeting, a 25 basis point rate cut is almost certain unless there's a significant jump in the figures."
Gold prices are bullish in the short term
Key technical resistance levels are under scrutiny
Philip Streible, chief market strategist at Blue Line Futures , is optimistic about the short-term trend of gold prices, but at the same time emphasizes the need to observe whether gold prices can hold the key level of $3,500 per ounce .
On the downside, the psychological integer level of 3450 provides short-term support.
Streible pointed out that the trend of precious metals is clear: " The rise in gold this time is because the market smells the smell of stagflation ."
The 14-day relative strength index (RSI) has risen significantly, significantly above the midline level, suggesting strong subsequent short-term bullish momentum.
(Spot gold daily chart, source: Yihuitong)
Non-farm payroll data becomes a key indicator of future market conditions
Looking ahead, Friday's non-farm payroll data will be a key factor influencing gold prices . Analysts generally believe that a weak job market performance will reinforce expectations of an easing Fed policy, further pushing up gold prices .
"If August employment data continues to show weak hiring and a loosening of the labor market, a September rate cut will become a foregone conclusion," Bill Adams, chief economist at Comerica Bank, said in a report. "Our forecast is that non-farm payrolls will increase by 45,000 in August and the unemployment rate will remain at 4.2%."
The credibility of the US dollar has been damaged, and there is ample room for gold prices to rise
"Trump has taken control of Fed policy, which means lower interest rates and higher gold prices are inevitable," said Naim Aslam, chief investment officer at Zaye Capital Markets.
Chantelle Sivan, head of research at Capitalight, believes that the conflict between Trump and the Fed will continue to weaken the international status of the US dollar. Against this background, the room for gold prices to rise is immeasurable, and it is only a matter of time before gold hits a record high.
The logic behind institutions' bullish outlook on gold
Schroder analysts reiterated their bullish view on gold in their market report, saying that in the current environment of high policy volatility, a fragile fiscal environment, and increased uncertainty among investors about the long-term role of US government bonds and the US dollar, gold is a valuable diversification investment tool and its role as "portfolio insurance" remains valid .
While Schroders continues to believe that the probability of a U.S. recession in the medium term is low, they also caution that the "near-perfect macro backdrop" currently priced in by the market (i.e., resilient growth and stable inflation) is more likely to disappoint in the coming months and investors may be underestimating the risks on inflation and growth.
Current situation in the gold market
Gold faced some difficult headwinds in the second quarter, as the economy initially appeared to be able to withstand higher tariffs and a changing labor market (partly due to stricter immigration controls), but disappointing July jobs data (including significant downward revisions to May and June) significantly changed market sentiment.
Luke suggested that the key question now is to what extent the market has digested the "bad news" given that gold prices have risen nearly 30% since the beginning of the year.
Although investment demand grew at its fastest pace since 2020 in the first half of the year, Luke believes there is still room for demand to grow in the second half of the year. He points out that quarterly total investment demand remains within the post-2010 range, and his long-term view is that investment demand will grow meaningfully throughout the cycle, far exceeding previous total tonnage peaks .
Luke specifically expects Western demand in North America and Europe to catch up to record investment levels in Asia. He noted that the contrast between East and West markets remains significant: total ETF flows in the US and Europe have been low compared to past cycles, and a significant portion of global ETF growth in April this year came from China. He believes the market is still far from the anticipated "true global bid for gold."
At 14:20 Beijing time, spot gold was trading at 3486.71.
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