By: Economy Middle east

Gold prices remained steady near an all-time high on Monday, inching closer to the crucial $3,600 threshold, supported by increasing expectations of a U.S. Federal Reserve rate cut this month following a less-than-anticipated jobs report from last week. 

In Dubai, gold rates saw a slight dip compared to the previous day. The price of 24-carat gold fell by AED0.15, settling at AED431.83 per gram. Similarly, 22-carat gold decreased by AED0.14 to AED395.84 per gram, while 21-carat gold dropped by AED0.13, now priced at AED377.85 per gram. Additionally, 18-carat gold saw a reduction of AED0.11, bringing its price to AED323.87 per gram. 

Globally, spot gold fell 0.13 percent to $3,582.26 per ounce. Bullion reached a record high of $3,599.89 on Friday.

Weak job growth in August

U.S. job growth weakened significantly in August, and the unemployment rate increased to a nearly four-year peak of 4.3 percent, confirming that labor market conditions were deteriorating and solidifying the case for a Fed rate cut next week. Traders have fully anticipated a 25-basis point cut this month, with an 8 percent likelihood of a larger 50-basis point rate cut, according to the CME FedWatch tool. Lower interest rates reduce the opportunity cost of holding non-yielding bullion and pressure the dollar, making gold more affordable for investors holding other currencies.

Attention now turns to the U.S. inflation report on Thursday, which could provide further clarity on the scale of the Fed’s anticipated rate cut. Bullion has surged 37 percent so far this year following a 27 percent increase in 2024, driven by the dollar’s weakness, central bank buying, a more accommodating monetary policy backdrop, and broader geopolitical and economic uncertainty. China’s central bank added gold to its reserves in August, extending its buying spree into a 10th consecutive month. Meanwhile, gold speculators increased net long positions by 20,740 contracts to 168,862 in the week ending September 2. Elsewhere, spot silver dipped 0.5 percent to $40.75 per ounce. Platinum rose 0.1 percent to $1,374.35, while palladium remained stable at $1,109.71.

Strong demand for gold

Additional recent data from the World Gold Council highlights a continued strong demand for gold in the first half of 2025, with global investment demand increasing by 15 percent year-on-year, driven largely by ETFs and sovereign purchases. The Council’s mid-year update indicates that central banks worldwide added nearly 400 tons of gold to their reserves in the first six months, the highest half-year total since 2016. The International Monetary Fund (IMF) also noted in its latest financial review that ongoing geopolitical tensions and inflationary concerns have sustained investor interest in safe-haven assets like gold. 

According to the U.S. Geological Survey (USGS), global gold mine production is forecast to grow moderately through 2025, but supply constraints and rising extraction costs are expected to limit a significant increase in output. Furthermore, the London Bullion Market Association (LBMA) reported that gold trading volumes in London remain robust, reflecting persistent market liquidity and investor engagement amid global economic shifts.