Gold prices rallied strongly on Friday (September 5), edging within cents of the historic $3,600 per ounce level after disappointing U.S. labor data boosted expectations that the Federal Reserve will cut interest rates this month.
Spot gold jumped 1.4% to $3,596.55/oz by the close of trading, after briefly hitting a record $3,599.89/oz earlier in the session. Gold futures gained 1.3%, settling at $3,653.30/oz. This marks the strongest weekly advance for the precious metal in nearly four months.
So far in 2025, gold has climbed 37%, building on a 27% surge in 2024. Analysts attribute the rally to a weaker U.S. dollar, strong central bank buying, looser monetary policy, and heightened global economic and geopolitical uncertainty.
Fresh U.S. labor market data showed job growth slowing significantly in August, while the unemployment rate rose to 4.3%. The figures reinforced expectations that the Fed will ease policy in its September meeting.
Traders are now pricing in a 90% probability of a 25-basis-point cut and a 10% chance of a 50-basis-point cut.
Analysts also highlighted concerns over the Fed’s independence. President Donald Trump has repeatedly criticized the central bank and even attempted to remove Governor Lisa Cook, raising fears of political interference in monetary policy.
Such uncertainty has strengthened gold’s appeal as a safe-haven asset, particularly in an environment of lower interest rates.
Despite surging global prices, physical demand in top-consuming nations China and India weakened this week. Buyers are holding back as record-high prices make gold increasingly expensive in local markets.
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