Gold settles higher as Fed rate cut bets grow

Gold bars

Gold prices rose at Monday’s close, as growing expectations of a Federal Reserve interest rate cut in September supported demand for the metal following data that signaled a weakening US labor market.

Gold futures for December delivery climbed 0.78%, or $26.6, to settle at $3,426.4 an ounce.

The move coincided with a rise in market bets on a 25 basis-point rate cut at the Fed’s September meeting, with odds climbing to 88%, up from around 80% a day earlier and 63% a week ago, according to the CME FedWatch Tool.

The shift in sentiment followed last week’s data showing that the US economy added fewer jobs than expected in June, alongside downward revisions to the previous two months’ figures by a combined 258,000 jobs, a sign of a sharp deterioration in labor market conditions.

Trade tensions also remained a key support for gold prices. On Sunday, the US Trade Representative said in media comments that tariffs imposed last week by US President Donald Trump on several countries were likely to remain in place rather than be rolled back as part of ongoing negotiations.

Amid persistent concerns over growth and inflation in the US driven by elevated tariffs, Citi raised its three-month gold price forecast to $3,500 per ounce, up from a prior estimate of $3,300.