Gold

hit a fresh record on Monday, bolstered by an unexpectedly weak

U.S. employment

report that saw wagers increase on the

United States Federal Reserve

cutting interest rates.

Bullion rose as much as one per cent, to more than US$3,622 an ounce, eclipsing the previous record set on Friday after a pivotal U.S. payrolls report showed a slowdown in hiring, while unemployment increased to the highest level since 2021.

That made swaps traders boost bets on

interest rate

cuts, and they are now pricing in 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 U.S. central bank’s future.

Looking ahead, renewed rate-cut hopes will face tests this week, from benchmark revisions for U.S. jobs data on Tuesday and U.S. producer and consumer inflation prints on Wednesday and Thursday. Traders will also watch how the market absorbs auctions of three-, 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

U.S. President Donald Trump

’s attacks against the Fed has increased worries over its independence, with gold prices rallying more than seven per cent over the past two weeks as demand for safe-haven assets intensifies.

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 US$5,000 an ounce if the Fed’s independence were damaged and investors shifted just a small portion of holdings from Treasuries into bullion.

“I wouldn’t want to stand on the short side of this trade, though I do think profit taking could emerge,” said Ahmad Assiri, an analyst at Pepperstone. “Today’s rally is being powered by multiple forces converging at once, a backdrop that keeps the medium-term story intact, even if the near term turns volatile.”

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 U.S. Customs and Border Protection ruling weeks ago stunned traders and caused confusion by indicating bullion would be subject to import duties.

Meanwhile, data released on 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 U.S. dollars.

Spot gold was trading 0.8 per cent higher at US$3,615.93 an ounce as of 11:47 a.m. in London. The Bloomberg Dollar Spot Index edged lower. Silver, palladium and platinum all gained.

With assistance from Mark Burton and Sybilla Gross

Bloomberg.com