Gold prices increased nearly 2%, reaching a one-week peak, on Friday following disappointing U.S. payrolls data that heightened expectations for a Federal Reserve rate cut, alongside new tariff announcements that fueled safe-haven demand. Spot gold attained its peak level since July 25, increasing by 1.8% to $3,347.66 per ounce as of 0148 p.m. ET (17:48 GMT), following an earlier rise of up to 2% today. Bullion experienced an increase of 0.4% over the course of the week.
U.S. gold futures concluded the trading session with an increase of 1.5%, reaching a price of $3,399.8. Payroll figures were reported below expectations, yet slightly above market projections. “So, this gives a better probability that the Federal Reserve will cut (rates) later in the year,” stated Bart Melek, head of commodity strategies at TD Securities.
Gold, characterized as a non-yielding asset, typically exhibits strong performance in an environment marked by low interest rates. In July, U.S. job growth exhibited a more pronounced deceleration than anticipated, as nonfarm payrolls recorded an increase of 73,000 jobs for the month. This follows a downward revision of the previous month’s figures, which showed an increase of 14,000 in June, according to the Labor Department’s Bureau of Labor Statistics.
Market participants are currently forecasting two rate reductions by the end of the year, starting in September. “We are currently facing a scenario characterized by persistent inflationary pressures stemming from tariffs and wages, while simultaneously, employment figures are underwhelming.” In that scenario, a rate cut by the Fed would significantly influence gold prices positively, according to Melek.
On the trade front, the latest wave of tariffs imposed by Trump on exports from numerous trading partners, including Canada, Brazil, India, and Taiwan, resulted in a decline in global markets as nations sought negotiations to secure more favorable agreements. Gold, often regarded as a safe haven, tends to flourish amid economic and geopolitical instability. Spot silver increased by 0.4% to $36.88 per ounce, while platinum rose by 1.2% to $1,304.91, and palladium saw a gain of 1.4% to $1,208.05. Nonetheless, all three metals recorded losses for the week.