Latest News

Gold gains nearly 2% after US payrolls data boosts hopes of rate cuts

Gold prices rose by almost 2% on Friday, reaching a new high. Weaker-than-expected U.S. employment data increased expectations of lowered Federal Reserve rates, while fresh tariff announcements sparked demand for safe-haven assets.

As of 0931 am, spot gold rose 1.9%, to $3,351.61 an ounce. ET (13.31 GMT), achieving its highest level since the 25th of July. Bullion has gained 0.3% this week.

U.S. Gold Futures increased 1.7% to $3405.20.

"Payrolls came in below expectations but slightly higher than what the market had projected. This gives a higher probability that the Federal Reserve (rates will be cut) later this year, said Bart Melek.

"We have a situation in which we continue to face inflationary pressures from wages and tariffs, but the job numbers are still disappointing." In that case, if (rates) are cut by the Fed, it will have a material positive impact on gold.

In a low interest rate environment, gold, which is a non-yielding investment, performs well.

The Bureau of Labor Statistics of the Labor Department reported that U.S. employment growth was slower than expected in July. Nonfarm payrolls increased by 73,000 last month after increasing by 14,000 jobs in June.

The market participants now expect two rate reductions by the end of the year, starting in September.

Fed Chair Jerome Powell said it was too early to predict whether the central banks interest rate target will be cut in September.

Trump's latest tariffs on dozens of countries, including Canada and Brazil, have sent the global markets into a tailspin as nations pushed to negotiate better deals.

Gold is a safe-haven during times of economic and geopolitical uncertainty.

Silver spot was up by 1.1% at $37.14 an ounce. Platinum rose 0.6% to 1,296.58 while palladium rose 2.3% to $1,217.91. (Reporting by Sarah Qureshi in Bengaluru; Editing by Vijay Kishore)

(source: Reuters)