At 09:51 GMT, XAU/USD is trading $2649.92, down $8.62 or -0.32%.
Gold Poised for Best Quarter Since 2016
Despite the recent pullback, gold remains near record highs and is on track to post its best quarterly performance in over eight years. Prices have surged more than 14% this quarter, largely fueled by a dovish U.S. Federal Reserve, which cut rates by 50 basis points, and ongoing geopolitical tensions in the Middle East. Additionally, China’s stimulus measures have supported demand for safe-haven assets. For the month of September, gold has gained 6%, bolstered by last week’s peak of $2685.42.
Market analysts suggest further gains could be in store if upcoming U.S. labor market data supports expectations for an additional 75 basis points in rate cuts by the Federal Reserve before year-end. Tim Waterer, Chief Market Analyst at KCM Trade, noted, “Gold still looks poised to have a potential run at $2,700 if labor market data this week aligns with the potential of more Fed easing.”
Rising Treasury Yields and Inflation Concerns
Meanwhile, U.S. Treasury yields have been climbing, as investors assess the latest inflation data and its implications for future monetary policy. The Federal Reserve’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) index, showed a modest 0.1% month-over-month increase for August, with the annual inflation rate slowing to 2.2%. Core PCE, which excludes volatile food and energy prices, rose 2.7% year-on-year, signaling that inflation pressures may be abating.
The market is awaiting additional economic data, including September’s non-farm payrolls and unemployment figures. These data points, along with speeches from Fed officials like Chair Jerome Powell, could provide more clarity on the central bank’s rate outlook.