Gold soars above 3600! Gold hits record high, supported by interest rate cuts and safe-haven factors. But where lies the only risk?
2025-09-08 21:54:42
Gold prices opened the week with a strong bullish pattern during the Asian and European trading sessions on Monday (September 8th), soaring to over $3,600 per ounce, a new all-time high. This rally continued last week's upward trend, driven by growing market confidence that the Federal Reserve will initiate interest rate cuts at its September monetary policy meeting—a policy shift now seen as a near-inevitable outcome following a series of weak US labor market data. Year-to-date, the precious metal has seen a cumulative gain of approximately 38%, highlighting its strong appeal as investors flock to the safe-haven asset.
As of press time, spot gold was trading around $3,624 per ounce, continuing to break through new price ranges. The overall weakening of the US dollar index, coupled with expectations of the Federal Reserve's imminent monetary policy easing, has supported high gold demand.
Economic data released by the United States last Friday (September 5th) clearly confirmed that the U.S. labor market is gradually losing momentum. The non-farm payroll report showed that the U.S. added only 22,000 non-farm jobs in August, far below market expectations of 75,000. At the same time, the unemployment rate climbed to 4.3%, reaching its highest level since the end of 2021. In his speech at the Jackson Hole Global Central Bank Annual Meeting in late August, Federal Reserve Chairman Jerome Powell warned that "downside risks to the job market are increasing," and defined the current labor market as "a peculiar equilibrium"—with both labor supply and demand showing weakness. The U.S. dollar index fell 0.8% intraday that day, and market sentiment shifted from when the United States would cut interest rates to how much. The market is questioning whether the declining dollar can continue to serve as a reservoir of global liquidity, and gold has become one of the answers.
Furthermore, overall market sentiment continues to provide strong support for gold. Amid lingering inflationary pressures, weakening confidence in policymakers, and potential threats to the Federal Reserve's independence, central banks worldwide continue to increase their gold reserves to reduce their reliance on the US dollar and US Treasuries. US Treasuries have always served as an excellent safe haven for funds, but last Wednesday, US 30-year Treasury bonds experienced a sell-off, with yields briefly reaching the critical 5% mark.
The US government's push for stablecoins also indirectly confirms its search for a new fulcrum for US debt. Meanwhile, geopolitical tensions and ongoing global trade frictions have further fueled safe-haven demand, further strengthening gold's value-store function as it approaches historical highs.
After three consecutive days of decline, U.S. Treasury yields began to stabilize on Monday. The benchmark 10-year Treasury yield remained near 4.09%, its lowest level since April, while the 30-year Treasury yield remained stable at around 4.78%. However, the 2-year Treasury yield, which is sensitive to interest rate fluctuations, remained under pressure at 3.51%, a trend that fully reflects the market's firm expectations for the Federal Reserve's easing policy.
Before the release of the US jobs data, traders had fully priced in a 25 basis point rate cut at the Federal Reserve's September 16-17 meeting. Following the release of the weaker-than-expected non-farm payroll data, data from the CME FedWatch Tool indicates that the market's pricing in the probability of a 50 basis point rate cut has risen to approximately 10% (from virtually zero a week ago), while the probability of a 25 basis point cut remains around 90%. Futures market pricing also suggests that investors anticipate three rate cuts from the Federal Reserve this year.
(CMEFedWatch interest rate futures, September 8)
Political uncertainty in Japan triggered market volatility following Prime Minister Shigeru Ishiba's resignation, prompting the launch of a leadership race within the ruling party. The yen came under renewed downward pressure, while Japanese government bond yields edged higher as investors awaited clarity on his successor's fiscal and monetary policy stance.
The French government is on the brink of collapse, and French Prime Minister François Bayrou will face a vote of confidence in parliament at 1 a.m. Beijing time.
Bayrou is seeking parliamentary backing for his 2026 austerity plan, which calls for 44 billion euros in spending cuts, including freezing pensions, social benefits and tax brackets, and imposing strict limits on government spending. If Bayrou fails to secure the confidence vote, French President Emmanuel Macron will either appoint a new prime minister who can command the support of a divided parliament or call early elections.
U.S. Treasury Secretary Scott Bessant expressed confidence that President Donald Trump's tariff strategy would ultimately be upheld by the Supreme Court, but acknowledged the risks the administration faces if it loses the case—a statement that kept trade policy risks front and center in the market. In an interview with NBC on Sunday, Bessant warned that if the tariffs are ruled invalid, the Treasury would have to refund approximately 50% of the tariffs collected. He further suggested that if the case drags on until mid-2026, tariffs worth between $750 billion and $1 trillion could need to be rescinded, potentially causing significant market volatility.
With the pace of US economic data releases slowing this week, inflation data is becoming a key focus for the market: the Producer Price Index (PPI) will be released on Wednesday, while the more crucial Consumer Price Index (CPI) report will be released on Thursday. Given that the market has already taken the Federal Reserve's September rate cut as a fait accompli, these data releases will become key risk events, with their results potentially influencing whether policymakers ultimately choose to implement the standard 25 basis point rate cut or consider a more substantial easing strategy.
Spot gold continued its bullish trend on Monday, climbing to a new all-time high near $3,620 after breaking through the $3,500 consolidation range last week. After breaking through the key $3,500 range, the current measured increase is at the 3,700 integer mark.
On the downside, if there is profit-taking in the market, $3,550 will become the immediate support level, followed by $3,500, which will constitute the next key defense level.
At the same time, we can continue to pay attention to the US PPI and CPI data. PPI is the leading data of CPI for 2-6 months. The market is betting in advance on a larger interest rate cut by the Federal Reserve. If inflation data is lower than expected, the US dollar may accelerate its decline.
However, gold is currently in a situation where inflation exceeding expectations is directly beneficial to gold, while inflation lower than expected strengthens the interest rate cuts and is still beneficial to gold. The enemy of gold may be the inflation level that meets expectations combined with crowded trading and lucrative profit-taking.
(Spot gold daily chart, source: Yihuitong)
At 21:42 Beijing time, spot gold was trading at $3,625 per ounce.
As of press time, spot gold was trading around $3,624 per ounce, continuing to break through new price ranges. The overall weakening of the US dollar index, coupled with expectations of the Federal Reserve's imminent monetary policy easing, has supported high gold demand.
As the dollar allocation fluctuates, the alternative property of gold as a reservoir becomes more prominent
Economic data released by the United States last Friday (September 5th) clearly confirmed that the U.S. labor market is gradually losing momentum. The non-farm payroll report showed that the U.S. added only 22,000 non-farm jobs in August, far below market expectations of 75,000. At the same time, the unemployment rate climbed to 4.3%, reaching its highest level since the end of 2021. In his speech at the Jackson Hole Global Central Bank Annual Meeting in late August, Federal Reserve Chairman Jerome Powell warned that "downside risks to the job market are increasing," and defined the current labor market as "a peculiar equilibrium"—with both labor supply and demand showing weakness. The U.S. dollar index fell 0.8% intraday that day, and market sentiment shifted from when the United States would cut interest rates to how much. The market is questioning whether the declining dollar can continue to serve as a reservoir of global liquidity, and gold has become one of the answers.
Risk aversion boosts gold's safe-haven appeal
Furthermore, overall market sentiment continues to provide strong support for gold. Amid lingering inflationary pressures, weakening confidence in policymakers, and potential threats to the Federal Reserve's independence, central banks worldwide continue to increase their gold reserves to reduce their reliance on the US dollar and US Treasuries. US Treasuries have always served as an excellent safe haven for funds, but last Wednesday, US 30-year Treasury bonds experienced a sell-off, with yields briefly reaching the critical 5% mark.
The US government's push for stablecoins also indirectly confirms its search for a new fulcrum for US debt. Meanwhile, geopolitical tensions and ongoing global trade frictions have further fueled safe-haven demand, further strengthening gold's value-store function as it approaches historical highs.
Market reaction
After three consecutive days of decline, U.S. Treasury yields began to stabilize on Monday. The benchmark 10-year Treasury yield remained near 4.09%, its lowest level since April, while the 30-year Treasury yield remained stable at around 4.78%. However, the 2-year Treasury yield, which is sensitive to interest rate fluctuations, remained under pressure at 3.51%, a trend that fully reflects the market's firm expectations for the Federal Reserve's easing policy.
Before the release of the US jobs data, traders had fully priced in a 25 basis point rate cut at the Federal Reserve's September 16-17 meeting. Following the release of the weaker-than-expected non-farm payroll data, data from the CME FedWatch Tool indicates that the market's pricing in the probability of a 50 basis point rate cut has risen to approximately 10% (from virtually zero a week ago), while the probability of a 25 basis point cut remains around 90%. Futures market pricing also suggests that investors anticipate three rate cuts from the Federal Reserve this year.
(CMEFedWatch interest rate futures, September 8)
A turbulent international environment is a breeding ground for gold
Political uncertainty in Japan triggered market volatility following Prime Minister Shigeru Ishiba's resignation, prompting the launch of a leadership race within the ruling party. The yen came under renewed downward pressure, while Japanese government bond yields edged higher as investors awaited clarity on his successor's fiscal and monetary policy stance.
The French government is on the brink of collapse, and French Prime Minister François Bayrou will face a vote of confidence in parliament at 1 a.m. Beijing time.
Bayrou is seeking parliamentary backing for his 2026 austerity plan, which calls for 44 billion euros in spending cuts, including freezing pensions, social benefits and tax brackets, and imposing strict limits on government spending. If Bayrou fails to secure the confidence vote, French President Emmanuel Macron will either appoint a new prime minister who can command the support of a divided parliament or call early elections.
The US tariff conundrum: The shoe is unlikely to drop
U.S. Treasury Secretary Scott Bessant expressed confidence that President Donald Trump's tariff strategy would ultimately be upheld by the Supreme Court, but acknowledged the risks the administration faces if it loses the case—a statement that kept trade policy risks front and center in the market. In an interview with NBC on Sunday, Bessant warned that if the tariffs are ruled invalid, the Treasury would have to refund approximately 50% of the tariffs collected. He further suggested that if the case drags on until mid-2026, tariffs worth between $750 billion and $1 trillion could need to be rescinded, potentially causing significant market volatility.
With the pace of US economic data releases slowing this week, inflation data is becoming a key focus for the market: the Producer Price Index (PPI) will be released on Wednesday, while the more crucial Consumer Price Index (CPI) report will be released on Thursday. Given that the market has already taken the Federal Reserve's September rate cut as a fait accompli, these data releases will become key risk events, with their results potentially influencing whether policymakers ultimately choose to implement the standard 25 basis point rate cut or consider a more substantial easing strategy.
Technical Analysis:
Spot gold continued its bullish trend on Monday, climbing to a new all-time high near $3,620 after breaking through the $3,500 consolidation range last week. After breaking through the key $3,500 range, the current measured increase is at the 3,700 integer mark.
On the downside, if there is profit-taking in the market, $3,550 will become the immediate support level, followed by $3,500, which will constitute the next key defense level.
At the same time, we can continue to pay attention to the US PPI and CPI data. PPI is the leading data of CPI for 2-6 months. The market is betting in advance on a larger interest rate cut by the Federal Reserve. If inflation data is lower than expected, the US dollar may accelerate its decline.
However, gold is currently in a situation where inflation exceeding expectations is directly beneficial to gold, while inflation lower than expected strengthens the interest rate cuts and is still beneficial to gold. The enemy of gold may be the inflation level that meets expectations combined with crowded trading and lucrative profit-taking.
(Spot gold daily chart, source: Yihuitong)
At 21:42 Beijing time, spot gold was trading at $3,625 per ounce.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
