The price of gold rose by 0.15%, as the weakening of the US currency offset the rise in yields on US Treasury bonds. Since the beginning of September, gold has risen in price by 6.2%.
Meanwhile, in the third quarter, precious metal prices jumped by 13.1%, which is the best quarterly result since the 1st quarter of 2016. The gold rally was caused by the aggressive easing of the Fed's monetary policy, measures to stimulate the Chinese economy, the escalation of the conflict in the Middle East, as well as expectations of another significant reduction in the Fed's interest rate. According to the CME FedWatch Tool, markets see a 54.0% probability of a 0.50% rate cut at the November meeting and a 50.1% probability of a 0.25% rate cut in December, with a 0.75% rate cut expected by the end of the year. Zero-yield bullion tends to be a preferred investment in a low interest rate environment and during geopolitical turmoil.
Fed Chair Jerome Powell and Governor Michelle Bowman are expected to deliver speeches later in the day, which could offer insights on the policy outlook. Also this week, various reports on the US labor market will be presented, while data on nonfarm payrolls for September will be key for investors. Economists expect nonfarm payrolls to rise by 145,000. That’s similar to the August increase and would leave three-month average job growth near its weakest since mid-2019. Recent labor unrest suggests Friday's jobs report may be the last clean reading of the US employment market before the next Fed meeting.