Usman Salis
Gold had a solid Monday, rising 0.39% to $3,375 as investors got excited about potential Fed rate cuts. The rally came after Friday's terrible jobs report that has everyone thinking the Fed might cut rates in September. Market pricing shows an 87% chance of a cut at the September 17 meeting.
The jobs data was ugly. The Bureau of Labor Statistics revised down May and June payrolls by 258,000 jobs - a massive miss that vindicated Fed Governor Christopher Waller's dovish shift. He's been saying tariff inflation won't last and worrying about employment.
Treasury yields dropped during the session, which always helps gold since it doesn't pay interest. The 10-year Treasury fell to 4.20%, adding to Friday's 16-point plunge. The dollar index barely moved, up just 0.07% to 98.74.
Gold (XAU) Benefits from Economic Uncertainty
The economic picture keeps getting messier. Those tariffs on Canada, Brazil, India, Taiwan and Switzerland (20-39% rates) are staying put according to Trade Rep Jamieson Greer. Factory orders tanked 4.8% in June as aircraft orders collapsed, while manufacturing stays squeezed by tariff-driven input costs.
Consumer sentiment improved to 61.7, with inflation expectations steady at 4.5% (one year) and 3.4% (five years).
Citi Raises Gold (XAU) Target to $3,500
Here's the big news for gold bugs: Citi just bumped their three-month forecast from $3,300 to $3,500 per ounce. They're betting on "US growth and tariff-related inflation concerns" plus a weaker dollar driving gold to "new all-time highs."
Technically, gold broke above key moving averages at $3,342 and cleared $3,350. Next target: $3,400, then potentially the June peak at $3,452 and the year-high of $3,500.
Downside support sits at $3,342, then $3,300, with the 100-day average at $3,263. For now, the trend looks up as long as Fed stays dovish and data stays soft.
Usman Salis
