Weak US jobs data fuels expectations of Federal Reserve rate cuts, boosting demand for non-yielding gold assets.
Gold (XAU/USD) extended its rally to a third straight session, reaching its highest level since June 5 above $4,400 in Asian trading on Tuesday. The move follows a weaker-than-expected US jobs report last Friday, which signaled a cooling labor market and reduced expectations for further Federal Reserve interest rate hikes.
The precious metal has risen for five of the last six sessions, supported by its status as a safe-haven asset and hedge against inflation. Central banks, particularly in emerging markets, have also increased gold reserves, with 2022 purchases hitting a record 1,136 tonnes worth $70 billion.
Investors are now pricing in a higher likelihood of Fed rate cuts, which typically boosts gold by lowering the opportunity cost of holding non-yielding assets.