New York: Gold surged to fresh record highs on Wednesday, buoyed by weak US employment data, tumbling Treasury yields, and heightened expectations of an imminent Federal Reserve rate cut. XAU/USD touched an all-time peak of $3,895 before easing slightly, with prices hovering near $3,871 in late trade, still up more than 0.30% on the day.
Weak US jobs data reinforces Fed cut bets
The latest ADP National Employment Change report showed that private payrolls shrank by 32,000 in September, a stark miss compared to forecasts of 50,000 job gains. The prior month’s data was also revised lower, underscoring growing concerns about the health of the labour market.
Meanwhile, the US government shutdown has delayed the release of official Nonfarm Payrolls data, increasing uncertainty in markets. Still, investors overwhelmingly expect the Fed to cut interest rates by 25 basis points at its October 29 policy meeting, with CME FedWatch odds pricing a 98% probability.
Treasury yields and dollar soften
The dismal jobs data pushed US Treasury yields sharply lower, with the 10-year note yield dropping nearly five basis points to 4.106%. Real yields, closely tied to gold’s performance, held steady at 1.796%, offering bullion further support.
The US Dollar Index (DXY) slipped 0.11% to 97.68, marking a modest retreat that also helped gold maintain its rally.
Manufacturing data mixed but still weak
The ISM Manufacturing PMI rose slightly to 49.1 in September from 48.7 in August, indicating some stabilisation but remaining in contraction for a seventh straight month. Job openings also edged up to 7.23 million in August, but the hiring rate fell to 3.2%, the lowest since mid-2024, suggesting ongoing weakness in the labour market.
Technical outlook: Gold poised to retest record highs
From a technical perspective, gold remains biased to the upside despite forming a “shooting star” candle that typically signals potential weakness. Analysts note that a break below the September 30 low of $3,793 could trigger a pullback toward the 20-day SMA at $3,698.
On the upside, momentum remains intact for bullion to retest the $3,895 peak and possibly break above $3,900, should risk sentiment and Fed easing expectations continue to drive flows into safe-haven assets.
Conclusion
With jobs data weakening, yields falling, and the Fed expected to cut rates later this month, gold’s safe-haven appeal remains strong. Traders will closely watch the delayed Nonfarm Payrolls release and upcoming Fed signals for confirmation of the next leg in bullion’s record-breaking rally.