Gold near two-month highs as dollar weakens

Gold prices rose in the European market on Monday, maintaining gains for the fifth consecutive day and moving close to setting new two-month highs, supported by the weak performance of the US dollar against a basket of global currencies.

Markets are awaiting the release of key US labor market data on Tuesday, particularly the October jobs report, which was previously delayed due to the US government shutdown. The report is expected to provide strong clues about the future path of Federal Reserve monetary policy in 2026.

Price Overview

• Gold prices today: Gold rose by about 1.2% to $4,349.35, from an opening level of $4,299.39, and recorded a low at $4,295.84.

• At Friday’s settlement, gold prices gained 0.45%, marking a fourth consecutive daily advance, and hit a two-month high at $4,353.59 per ounce.

• The precious metal posted a weekly gain of 2.4% last week, its second weekly increase in the past three weeks, supported by the outcome of the Federal Reserve’s policy meeting.

US Dollar

The US dollar index fell by more than 0.1% on Monday, moving closer once again to its lowest levels in two months, reflecting the continued weakness of the US currency against a basket of global currencies.

As is well known, a weaker US dollar makes dollar-priced gold bullion more attractive to buyers holding other currencies.

The US dollar has remained under negative pressure since last week’s Federal Reserve meeting, after the outcome came less hawkish than markets had expected, reviving bets on the continuation of the federal rate-cutting cycle in 2026.

US Interest Rates

• The Federal Reserve cut interest rates by 25 basis points last week, bringing them to 3.75%, the lowest level since September 2022, marking the third consecutive cut in US interest rates.

• The decision was not unanimous, with 9 members voting in favor of the cut and 3 opposing it. Two members preferred keeping rates unchanged, while one member pushed for a larger 50-basis-point cut.

• According to CME’s FedWatch tool, pricing for keeping US interest rates unchanged at the January 2026 meeting stands at 76%, while the probability of a 25-basis-point cut is priced at 24%.

• Investors are currently pricing in two US rate cuts over the course of next year, while Federal Reserve projections point to only one 25-basis-point cut.

• To reassess these expectations, investors are closely monitoring further US economic data releases, along with comments from Federal Reserve officials.

• The US October jobs report is due on Tuesday, and is expected to provide strong evidence on the pace of growth in the world’s largest economy during the fourth quarter, which was heavily affected by the longest government shutdown in US history.

Gold Outlook

Market analyst for the Asia-Pacific region at OANDA, Kelvin Wong, said demand for gold is likely to remain strong ahead of the US nonfarm payrolls data.

Wong added that signs of weakness in the US labor market would keep short-term bond yields capped and further weaken the dollar, supporting gold’s rise toward the $4,380–$4,440 range after a strong rebound from the $4,243 per ounce support zone.

SPDR Fund

Gold holdings at SPDR Gold Trust, the world’s largest gold-backed ETF, increased by 2.29 metric tons on Friday, marking the second consecutive daily increase, bringing total holdings to 1,053.12 metric tons, the highest level since October 20.