- Gold prices rose on Friday, with spot gold reaching its highest level since June 23, and poised to record its first weekly gain in five weeks, mainly driven by weaker-than-expected U.S. employment data.
- The U.S. added 57,000 non-farm jobs in June, below the market's previous estimate of 110,000, prompting traders to lower their expectations for a Federal Reserve rate hike in September.
- The precious metals market strengthened overall, with silver, platinum, and palladium rising in tandem, while central bank gold purchases also supported medium-term demand for gold.
Cooling Employment Reshapes Rate Expectations
Weaker-than-expected U.S. labor market data became the core variable driving the rebound in gold prices. Non-farm employment in June increased by only 57,000, significantly below economists' estimates of 110,000. The slowdown in employment weakened market bets on continued Federal Reserve rate hikes and reduced the pressure on real interest rates to continue rising, thus bringing gold back into focus for asset allocation.
Gold Price Surge Points to Weekly Recovery
Spot gold rose 0.5% on Friday to $4,144.83 per ounce, reaching its highest level since June 23; U.S. August gold futures rose 0.8% to $4,157.50. On a weekly basis, gold prices are expected to rise by 1.2% this week, which, if maintained, would mark the first weekly increase since May 25.
Divergence Remains in Fed's Path
CME FedWatch data shows traders expect about a 54% chance of a Federal Reserve rate hike in September, down from 66% before the employment data release. San Francisco Fed President Daly stated that the Fed's next move is still unclear, current policy is slightly restrictive, but strong AI-related investments and a stable labor market make policy judgments more complex.
Precious Metals Gain Support in Tandem
Beyond gold, spot silver rose 0.5% to $61.28 per ounce, platinum rose 1.1% to $1,634.30, and palladium rose 0.2% to $1,270.25, with all three precious metals poised for weekly gains. The World Gold Council stated that central banks returned to buying mode in May, with official gold reserves increasing by a net 41 tons, providing additional support on the demand side for gold.
