Gold reaches new record high after weak US jobs data

ISTANBUL

The price of gold rose sharply to a new record high on Friday, after the weak non-farm payroll data for August fueled the expectations of a September Fed rate cut.

The price of one ounce of gold rose around 1.1% to reach the new all-time high of $3,586.89 as of 1235GMT.

After hitting the new record high, the price of gold stood at around $3,574 as of 1248GMT.

Gold had already reached record highs earlier this year, surpassing $3,500 amid global trade tensions triggered by US tariffs. The "safe haven" asset gained more than 30% so far this year.

While prices had since stabilized at around $3,400 as trade fears eased, rising expectations of a rate cut in Fed's September meeting again boosted demand for the metal as a traditional safe haven asset.

The new record followed the weak non-farm payroll data. The US economy added 22,000 jobs in August, well below the market expectations of 75,000.

Also, the June figure was revised downwards by 27,000 to a loss of 13,000, while the unemployment rate rose to 4.3% in August from 4.2% in July.

The Fed, under the constant criticism from US President Donald Trump, will be announcing its decision this month. The bank is very likely to issue a rate cut this month, according to money market estimates, and cut rates twice in total by the end of the year.

As inflation dipped below expectations in July and employment slowed, markets expect a 25 basis-point rate cut in the September meeting. The policy rate currently stands between 4.25% and 4.5%.

In mid-August, at the Jackson Hole symposium, Fed Chair Jerome Powell signaled a possible rate cut.

"With policy in restrictive territory, the baseline outlook and shifting balance of risks may warrant adjusting our policy stance," he said.

Trump's move to remove Fed Governor Lisa Cook also boosted demand for gold, as it raised concerns about the central bank's independence.