MARKET NEWS

(Bloomberg) -- Gold hit a fresh record on Monday, bolstered by an unexpectedly weak US employment report that saw wagers increase on the Federal Reserve cutting interest rates.

Bullion rose around 0.5% to more than $3,604 an ounce, narrowly higher than the previous record set on Friday when it rallied as much as 1.5%. A pivotal US payrolls report showed a slowdown in hiring, while unemployment increased to the highest level since 2021.

That saw swaps traders boost bets on interest rate cuts, and they are now pricing almost three reductions for the rest of this year. Lower borrowing costs tend to increase the appeal of non-yielding gold, which has also seen support from strong haven demand amid concerns over the US central bank’s future.

Looking ahead, renewed rate cut hopes will face tests this week from a benchmark revisions for US jobs data on Tuesday and US producer and consumer inflation prints on Wednesday and Thursday. Traders will also watch how the market absorbs auctions of 3-, 10-, and 30-year Treasuries.

Both gold and silver have more than doubled over the past three years, with mounting risks in geopolitics, the economy and global trade driving haven demand. An escalation in President Donald Trump’s attacks against the Fed has increased worries over its independence. He has vowed to gain a “majority, very shortly” on the central bank and bring down rates.

Investors are waiting for a landmark ruling on whether Trump has legitimate grounds to remove Fed Governor Lisa Cook, which could allow the president to replace her with a dovish-leaning official. Goldman Sachs Group Inc. said last week that gold could rally to almost $5,000 an ounce if the Fed’s independence were damaged and investors shifted just a small portion of holdings from Treasuries into bullion.

Trump’s administration also moved on Friday to exempt gold bullion, along with some metals, from his country-based tariffs. The measure formalizes a plan to exempt gold bars from tariffs, after a US Customs and Border Protection ruling weeks ago stunned traders and caused confusion by indicating bullion would be subject to import taxes.

Meanwhile, data released at the weekend showed the People’s Bank of China increased its gold holdings in August for a 10th month, in a continued push to diversify its reserves away from US dollars.

Spot gold was trading 0.5% to $3,604.70 an ounce as of 3:13 p.m. in Singapore. The Bloomberg Dollar Spot Index edged lower. Silver steadied, while palladium and platinum gained.

--With assistance from Mark Burton and Sybilla Gross.