Gold prices strengthened on Thursday (July 2nd), supported by weaker-than-expected US employment data and falling oil prices. Market focus is now on the US payrolls report due today for fresh clues regarding the Federal Reserve’s policy direction.
Spot gold rose 0.8% to US$4,064.79 per ounce at 02:51 GMT, after hitting its highest level since June 23rd in the previous session. Meanwhile, US gold futures for August delivery edged down 0.3% to US$4,070.10.
Previously, gold had hovered near its lowest level in more than seven months on Wednesday, before finally closing higher at US$4,029.89. This increase occurred after the ADP US private sector employment data showed results that fell short of market expectations.
ADP reported that the US private sector added 98,000 jobs in June, down from a gain of 122,000 in May. This figure was also lower than economists’ forecasts in a Reuters survey, which projected an increase of 118,000 jobs. This data has led some market participants to predict that the Nonfarm Payrolls (NFP) report could also signal a slowdown.
Federal Reserve Chairman Kevin Warsh said on Wednesday that inflation expectations and risks have declined in recent weeks. However, he reiterated the Fed’s commitment to bringing inflation back to its 2% target. According to the CME FedWatch Tool, market participants still estimate a 64% chance that the Fed will raise interest rates in September.
Meanwhile, oil prices fell after Iran and the United States concluded a round of indirect talks regarding the Strait of Hormuz, although there has been no significant progress toward a permanent peace deal. The decline in oil prices helped ease inflation concerns, but gold remains overshadowed by the risk of high interest rates. In other metals markets, silver rose 1.6% to US$60.06 per ounce, platinum strengthened 2% to US$1,607.67, and palladium added 1.4% to US$1,227.13.
Source: Newsmaker.id