Gold prices gained momentum ahead of the US employment data.

Critical Rise in Gold Prices in the USA

A critical economic agenda in the USA has led to significant volatility in gold prices ahead of the eagerly awaited employment data. With the weakening of the dollar, spot gold reached its highest level in recent weeks. The gram gold is approaching 6,000 lira, making strides towards reaching a historic peak.

Reasons Behind the Rise

Spot gold rose more than 1% in the first trading day of the week, reaching up to 4,345 dollars as of 11:30 AM (UTC). Meanwhile, U.S. gold futures are trading at 4,374 dollars, with an increase of 1.08%. Domestically, gram gold is trading at 5,690 lira, moving closer to the peak level of 5,975 dollars it reached on Friday.

Future Expectations

OANDA senior market analyst Kelvin Wong stated, "Gold seems likely to continue seeing high demand until the U.S. non-farm payroll data is announced. Signs of stagnation in the labor market will keep short-term yields limited and contribute to the dollar remaining weak. This could support a rise towards the 4,380-4,440 dollar range following a strong recovery from the support level of 4,243 dollars."

Central Bank Policies and Market Reaction

Despite the recent 25 basis point interest rate cut by the U.S. Federal Reserve, high inflation and uncertainties in the labor market are prompting investors to reflect on the Fed's policy outlook. Current market conditions have led investors to price in the possibility of two interest rate cuts next year. The U.S. employment report to be released this week will play a critical role in testing these expectations.

Corporate Investments May Rise

According to an evaluation by ANZ, the decision of India's pension funds to invest in gold and silver ETFs could be a step that increases corporate participation. "Such a regulation has the potential to enhance investor confidence. As a result, it may support allocations in portfolios," it was stated.