Gold prices approached a record high on Monday, driven by softer-than-expected US nonfarm payrolls data and heightened geopolitical risk from escalating tensions with Iran. The move underscores growing market concerns over economic slowdown and shifting Federal Reserve policy expectations.
- Gold futures (GC=F) reached $2,438 per ounce, nearing a record high
- US nonfarm payrolls rose by 120,000 in December, below the 185,000 consensus
- Unemployment rate increased to 4.2% in December
- USDJPY=X dropped to 151.80, reflecting yen strength as a safe-haven asset
- USDCAD=X climbed to 1.3820 amid divergent economic signals in North America
- Market expectations now favor Fed rate cuts as early as June 2026
Gold futures on the Comex exchange, tracked by the GC=F contract, rose to $2,438 per ounce, the highest level since records began, as investor sentiment pivoted toward safe-haven assets. The advance followed the release of US labor market data showing nonfarm payrolls increased by only 120,000 in December, significantly below the 185,000 forecast, while the unemployment rate edged up to 4.2%. The weak jobs report intensified speculation that the Federal Reserve may begin cutting interest rates as early as June 2026, reversing the tightening cycle that has dominated monetary policy since 2022. Lower expected rates reduce the opportunity cost of holding non-yielding assets like gold, fueling demand. Geopolitical tensions in the Middle East further supported the rally. Escalating rhetoric between Iran and Western allies, including new missile tests and naval standoffs in the Strait of Hormuz, elevated risk premiums across financial markets. Safe-haven flows poured into gold, as well as the Japanese yen, with USDJPY=X falling to 151.80, reflecting yen strength. Meanwhile, the USDCAD=X climbed to 1.3820, indicating dollar weakness relative to the Canadian dollar amid mixed economic signals in North America. The rally in gold has broad implications for investors across asset classes. Precious metals miners and ETFs have seen sharp gains, while fixed-income markets are pricing in a higher probability of rate cuts. Market participants now closely monitor upcoming inflation data and central bank commentary for further clues on monetary policy direction.