Gold (XAUUSD) is trading slightly higher on Monday amid a broad selloff of tech stocks and a rotation into value and defensive assets. The precious metal is also benefiting from a higher probability of lower interest rates in 2026.
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Gold typically sees increased demand when rates are lower. That’s because it doesn’t pay out interest, lowering the opportunity cost of holding it relative to interest-bearing assets, like Treasuries. As a safe-haven asset, gold also tends to perform well during periods of economic uncertainty.
Gold in Focus Ahead of Thursday’s Nonfarm Payrolls Data
A weak labor market is an indicator of economic uncertainty, and Thursday’s nonfarm payrolls report will provide a measure of how jobs are holding up. XS.com senior market analyst Rania Gule notes that a weak report could provide a boost to gold.
“Conversely, stronger-than-expected data could trigger a limited correction, though it would not, in my view, alter the underlying bullish trend,” added Gule.
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