Gold prices continued their unstoppable rally on Wednesday, notching a new record high above $3,560. The XAUUSD pair climbed nearly 0.85% during the day and has already gained over 3% for the week, marking a seventh consecutive session in positive territory.
This latest rally underscores the metal’s safe-haven appeal, fueled by a weaker US Dollar (USD) and renewed concerns over the health of the US labor market.
Labor Market Weakness Adds Fuel
Fresh data from the US Bureau of Labor Statistics revealed that Job Openings fell to 7.18 million in July, down from a revised 7.35 million in June, and well below the market’s forecast of 7.4 million.
This disappointing figure triggered speculation that the US economy could be cooling faster than expected, which in turn strengthened expectations of a Federal Reserve rate cut later this year.
As a result, the US Dollar Index (DXY) slipped by 0.25%, paving the way for gold to extend its upward trajectory.
Safe-Haven Demand in Focus
Tuesday’s global bond market sell-off and the bearish performance of major equity indexes drove a surge in safe-haven demand, which gold capitalized on.
Although bond markets stabilized somewhat on Wednesday, gold maintained its bullish momentum, supported by lingering geopolitical tensions and sustained central bank buying.
Market analysts highlight that persistent uncertainties from global conflicts to trade disputes continue to enhance gold’s appeal as a reliable store of value.
Analyst Outlook and Technical Levels
According to OCBC FX analysts Frances Cheung and Christopher Wong, multiple factors including central bank purchases, a potential Fed policy pivot, and ongoing geopolitical risks are fueling the current surge.
Technically, gold’s next resistance levels are set at $3,600, $3,750, and $3,890, with immediate support seen at $3,390 (21-day moving average) and $3,360 (50-day moving average).
A sustained weekly or monthly close above the $3,500 psychological level could open the door for even higher highs in the coming sessions.
Macro and Market Implications
The historic climb in gold prices reflects broader investor caution. The combination of a softening US labor market, waning Dollar strength, and dovish Fed expectations creates a perfect storm for the yellow metal’s rally.
Additionally, central banks particularly in emerging markets continue to diversify reserves by adding more gold, adding further upward pressure on demand.
Conclusion
Gold’s surge above $3,560 is more than just a technical breakout it’s a reflection of global uncertainty, Dollar fragility, and central bank positioning. With traders eyeing the next resistance at $3,600, the market remains bullish heading into the week’s critical employment report.
Unless the US labor market shows surprising strength or the Fed pivots to a hawkish tone, gold seems well-positioned to extend its record-breaking run in the sessions ahead.
