Although the last month has not been perfect for Nvidia, with its share price falling by almost 8%, gold continues to shine brighter, recently surpassing $3,600 per ounce and moving towards $3,700. To put this into context, most analysts did not expect the precious metal to reach these levels until next year, but here we are.

So, could we see the price of gold at $4,000 in December?

The answer depends mainly on what the Federal Reserve does with monetary policy: cut rates more quickly or take a more cautious approach. And for now, according to the CME FedWatch tool, there is an 88% chance of a 25 basis point cut and about a 12% chance of a 50 basis point cut on the September 17th meeting.

That said, the chances of a bigger move might rise later this week as new data comes in.

First up is today’s preliminary benchmark revision from the Bureau of Labor Statistics, covering labor market data through March 2025. The revision is expected to be downward by about 800,000 jobs. Notably, last year’s revision showed employers added 818,000 fewer jobs than initially reported.

Since the Fed’s goal includes promoting maximum employment, weaker job numbers could nudge policymakers toward a more aggressive rate cut. On the other hand, if the data proves less negative, the likelihood of a 50 basis point cut would drop, which could disappoint the S&P 500.

Other key reports for monetary policy prospects are Wednesday's Producer Price Index (PPI) and Thursday's Consumer Price Index (CPI). Forecasts suggest that headline PPI will accelerate to 3.6% year-on-year (after rising to 3.3% last month), while core PPI will increase to 3.8% from 3.7% in July.

On the CPI front, headline inflation is expected to rise to 2.9%, the highest since January, after two months at 2.7%. Core CPI (excluding food and energy) is likely to remain stable at 3.1%. Both reports are expected to show renewed inflationary pressure, primarily driven by ongoing trade wars.

If inflation data come in more moderate than expected, it would strengthen the case for a 50 basis points cut, boosting both stocks and gold while putting pressure on the dollar index. Conversely, an upside inflation surprise could trigger the opposite reaction, with the S&P 500 and XAUUSD facing a correction.

Now, regarding the potential for gold to continue its upward momentum, much of the positive news appears to be already priced in, which means a short-term pullback cannot be ruled out. However, over the longer term, prices are expected to keep rising, with the ongoing devaluation of the dollar supporting that trend.