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Gold breaches $3,600 for the first time

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A 90% chance of 25-bp rate cut in September - CME FedWatch

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China's central bank added gold for 10th straight month in

August

(Updates for U.S. morning hours)

By Sherin Elizabeth Varghese

Sept 8 (Reuters) - Gold surged past the $3,600 an ounce

level for the first time on Monday, hitting a fresh record high

as soft U.S. labor data reinforced expectations the Federal

Reserve will cut interest rates next week.

Spot gold rose 1.3% to $3,631.66 per ounce, as of

9:59 a.m. EDT (1349 GMT). Bullion hit a record high of

$3,636.69.

U.S. gold futures for December delivery were up 0.5%

to $3,670.80.

The yellow metal could extend its momentum toward

$3,700-$3,730 in the near-term, with any brief pullbacks likely

seen as buying opportunities, said Peter Grant, vice president

and senior metals strategist at Zaner Metals.

"Continued labor market softness and expectations of ongoing

Fed rate cuts into early 2026 could provide sustained support

for bullion."

Friday's jobs report showed U.S. employment growth slowed

sharply in August. Traders now see a 90% chance of a

quarter-point rate cut at the Fed's September meeting, with

around 10% chance of a larger 50-bps cut, according to the CME

FedWatch tool.

Lower rates reduce the opportunity cost of holding

non-yielding bullion.

Gold prices are up 38% so far this year, after gaining 27%

in 2024, bolstered by dollar softness, strong central bank

accumulation, dovish monetary settings, and heightened global

uncertainty.

China's central bank extended its gold-buying streak to a

10th straight month in August, official data showed on Sunday.

Benchmark 10-year U.S. Treasury yields, meanwhile, were near

their lowest in five months.

Investors are now awaiting U.S. producer price data on

Wednesday and consumer prices on Thursday for further clues on

the Fed's policy path.

"If weakness in U.S. data continues, then so too should the

ongoing bullish momentum in gold, as both the U.S. dollar and

yields fall further," said Fawad Razaqzada, market analyst at

City Index and FOREX.com.

Conversely "if the U.S. data shows surprise resilience in

the coming weeks, then that might cause gold to correct from

these elevated levels," Razaqzada added.

Elsewhere, spot silver rose 1% to $41.39 per ounce.

Platinum was up 0.7% to $1,382.25, and palladium

gained 2.1% to $1,134.56.