Witness history again: Spot gold breaks through $3,600! A $1,000 surge this year.

Driven by expectations of a Federal Reserve rate cut, international gold prices have continued to soar, continuing to make history!

On September 8th, London spot gold surpassed $3,600 per ounce, reaching a high of $3,635 per ounce, setting a new all-time high. So far this year, spot gold has surged by $1,000 per ounce, bringing its year-to-date gain to 38%, marking a strong bull market.

On September 8th, the US gold sector saw broad gains. As of press time, Harmony Gold rose 4%, Gold Fields rose over 3%, Royal Gold rose 0.37%, Colderen Mining rose over 1.2%, and Kinross Gold rose over 1.5%.

Driven by multiple factors, including the Federal Reserve's rate cut, stronger safe-haven demand, central bank gold purchases, and global capital inflows into gold ETFs, bullish sentiment in the gold market is high, and many institutions have raised their target prices for gold.

• Gold surges $1,000 this year

After more than four months of consolidation, gold prices are rising again, with strong momentum, driven by expectations of a Federal Reserve rate cut. Since mid-August, spot gold has surged from around $3,300, breaking through the $3,400 and $3,500 per ounce levels.

On September 8, London spot gold successfully surpassed $3,600 per ounce, reaching a high of $3,635 per ounce, a new all-time high. Data shows that spot gold has surged $1,000 per ounce so far this year, bringing its year-to-date gain to 38%.

The main Shanghai Gold 2510 contract on the China Futures Market closed up 1.02% this afternoon, with another surge of 1.06% in the evening session, breaking through 830 yuan per gram. The main COMEX gold contract also saw strong gains, currently at $3,675 per ounce.

Jinrui Futures analyst Wu Zijie pointed out that the most direct and powerful catalyst for this round of gold price increases stems from the significant cooling of US macroeconomic data, particularly the weakening job market.

On September 5th, the US non-farm payroll data disappointed, with only 22,000 new jobs added, far below the consensus forecast of 75,000 and significantly lower than the revised July figure. More alarmingly, the unemployment rate climbed to 4.3%, reaching its highest point since 2021.

"This series of data clearly demonstrates that the US labor market is stalling and downward pressure on the economy is increasing sharply. The weak employment data virtually paves the way for the Federal Reserve to cut interest rates at its September meeting. The market generally predicts that the Fed will initiate its first rate cut of the year," said Wu Zijie.

According to the CME FedWatch tool, traders believe there is a 90% probability of a 25 basis point rate cut by the Federal Reserve this month. Lower interest rates reduce the opportunity cost of holding gold and also weaken the US dollar, making gold relatively affordable for investors holding other currencies.

• A massive influx of funds into the gold market

In addition to expectations of a shift in monetary policy, safe-haven demand is also driving a surge in funds into the gold market.

Analysts at Swissquote say that bets on interest rate cuts are boosting demand for gold. Furthermore, the overall geopolitical landscape is highly uncertain, and we should consider that a significant portion of demand also comes from central bank purchases.

According to data from the World Gold Council and other institutions, although the pace of purchases slowed in the second quarter due to high gold prices, global central banks still net purchased over 400 tons of gold in the first half of 2025, far exceeding the historical average. Central banks in many countries, including China and Poland, continue to increase their gold reserves.

Wu Zijie believes that this is not only a strategic consideration to hedge against US dollar credit risk and geopolitical risks, but also sends a strong bullish signal to the market, creating a long-term positive for gold prices.

The continued rise in gold prices has also driven a large influx of funds into gold ETFs, much of which comes from increased holdings by institutional investors.

The latest report from the World Gold Council shows that gold ETFs saw net inflows of $5.5 billion in August, primarily from North America ($4.1 billion) and Europe ($1.9 billion), while Asia and other regions saw outflows.

This suggests that funds, primarily from institutional investors, are actively allocating to gold to mitigate macro risks and capture bullish trends.

In addition, speculators are also increasing their gold holdings. Data released last Friday by the U.S. Commodity Futures Trading Commission (CFTC) showed that speculators increased their net long positions in COMEX gold futures and options by 20,740 contracts to 168,862 contracts in the week ending September 2.

• Institutions are raising their gold forecasts.

This bull market in gold has exceeded countless expectations, driven by multiple factors.

Wu Zijie pointed out that this strong upward trend in gold prices is the result of the combined effects of macroeconomic fundamentals, risk aversion, and market capital flows. Expectations of a Federal Reserve rate cut have opened up upward potential for gold prices. Geopolitical and economic policy uncertainty has boosted gold's safe-haven value, while active capital inflows have fueled price increases.

These three intertwined forces together form a solid foundation for the current gold bull market.

Many institutions have raised their forecasts for gold's future performance. UBS analyst Giovanni Staunovo stated, "We forecast gold prices to reach $3,700 per ounce by mid-next year."

Goldman Sachs' latest report stated that its baseline forecast is for gold to reach $4,000 by mid-2026, with a tail-risk scenario of $4,500. In an extreme scenario, if only 1% of privately held US Treasury bonds flow into the gold market, gold prices could approach $5,000.

Morgan Stanley set a year-end gold price target of $3,800 per ounce in its latest research report.

The report specifically emphasized that the strong negative correlation between gold and the US dollar remains a key pricing factor. At present, if the US dollar index continues its depreciation trend, it will directly benefit precious metals denominated in US dollars.