Gold prices have soared past $3,600, reaching new highs despite the usual sluggishness of September. Several favorable factors are driving this increase. Gold’s upward trend began last year and continues strongly. While September typically sees lower prices, current developments around U.S. Federal Reserve policy and data changes are boosting gold’s appeal. This week’s upcoming Consumer Price Index report may influence gold prices even further.

Global and Domestic Influences on Gold Prices

Both global and local factors support gold prices, making major market shifts unlikely. Important elements include expected Federal Reserve easing, central bank gold purchases, ETF activity, a weak dollar, and threats of stagflation. Together, these factors offer strong support for gold. As we approach December and January—historically strong months for gold—traders are paying close attention to how these months might influence current trends. Many traders buy gold when prices dip. Currently, the main focus remains on benefiting from gold’s upward momentum. With gold now solidly above $3,600, we see a clear signal to stay bullish. The momentum since the breakout in late August suggests that buying call options or call spreads is a great way to ride this trend. This current surge is overcoming the usual September decline, hinting at stronger forces at work. The rally is mainly driven by expectations of Federal Reserve easing, which have become even stronger since last week’s disappointing non-farm payrolls report of just 95,000 jobs added. Following this news, the odds for a rate cut in November have risen to over 70%. Continued pressure on the U.S. dollar, now testing its yearly lows, further supports gold.

Market Strategies and Upcoming Data Releases

Strong physical demand is also seen as central banks added 55 tonnes to their gold reserves in August. Additionally, gold-backed ETFs experienced their biggest weekly inflow since the second quarter, bringing in over $2.5 billion. Traders should closely monitor this Thursday’s CPI report; a surprise rise in inflation could lead to a price correction. Given the market’s “buy the dip” mentality, any decline in prices is expected to attract strong buying interest. Selling out-of-the-money puts could be a worthwhile strategy, allowing traders to benefit from premiums if gold prices keep rising or to enter a long position at a reduced price. This is particularly relevant after the lengthy consolidation period from May to August 2025, which laid a solid foundation for the current price surge. The current strength is significant as we approach the traditionally positive seasonal period for gold in December and January. For now, we should capitalize on the upward momentum while being cautious around key data releases. Create your live VT Markets account and start trading now.

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