Gold futures surged to a record high of $3,540, driven by investor expectations of an interest rate cut by the Federal Reserve this month and continued strong demand from foreign central banks. The spot price of gold also rose to an all-time high, surpassing $3,533 per ounce.

The new record highs for gold come as global central banks’ holdings of the precious metal surpassed U.S. Treasury bond holdings for the first time since 1996, according to Bloomberg data compiled by strategic analyst Tavi Costa.

Costa wrote on the platform “X”: “This is likely the beginning of one of the most significant global rebalancing operations we’ve seen in modern history.”

A World Gold Council survey of central banks showed that the vast majority of participants believe global central bank gold reserves will increase over the next 12 months.

The price movement comes ahead of this week’s monthly jobs report. A weaker-than-expected jobs report could increase investor expectations for a larger interest rate cut at the Federal Reserve meeting later this month. Markets currently price in about a 90% chance of a 25 basis point rate cut in September.

Typically, lower interest rates boost gold prices, as the metal becomes more attractive when yields on interest-bearing assets decline.