Gold's stellar rally extended beyond the $3,600 level for the first time Monday after soft U.S. jobs data cemented expectations of an interest rate cut by the U.S. Federal Reserve next week.
Spot gold was up 0.9% at $3,617.76 per ounce, at 1033 GMT. Bullion rose to a record high of $3,622.07 earlier in the session.
Bullion has surged about 38% so far this year, building on a 27% gain in 2024, driven by a weaker dollar, strong central bank buying, a soft monetary policy backdrop, and geopolitical and economic uncertainty.
U.S. gold futures for December delivery were unchanged at $3,657.90.
U.S. job growth weakened sharply in August, data showed on Friday, and the unemployment rate increased to a nearly four-year high of 4.3%, confirming that labor market conditions were softening and sealing the case for a Fed rate cut next week.
"(Rate cut bets) are boosting the demand of gold. Moreover, the overall geopolitical scenario is extremely uncertain ... we should consider that a significant part of the demand is also coming from central bank buying," said Carlo Alberto De Casa, an external analyst at banking group Swissquote.
Traders have priced in a 90% chance of a 25-bp cut next week, according to the CME FedWatch tool. Lower interest rates decrease the opportunity cost of holding non-yielding bullion and weigh on the dollar, making gold cheaper for investors holding other currencies.
"We look for gold to rise to $3,700/oz by mid next year," said UBS analyst Giovanni Staunovo.
Benchmark 10-year U.S. Treasury yields, meanwhile, were near their lowest in five months.
Focus now shifts to U.S. Producer Price Index data on Wednesday and the Consumer Price Index on Thursday, that could offer more clarity on the size of the Fed's expected rate cut.
Meanwhile, China's central bank added gold to its reserves in August, extending purchases of bullion into a 10th straight month, official data showed on Sunday.
Elsewhere, spot silver rose 0.8% to $41.31 per ounce. Platinum climbed 1.5% to $1,393.45, and palladium gained 1.8% to $1,130.11.