Gold prices continued their upward trajectory, marking their strongest weekly performance in five weeks, as demand for the zero-yield precious metal surged on the back of softer U.S. jobs data. The latest figures reinforced market expectations for an interest rate cut by the Federal Reserve.
At 2:02 p.m. ET (1802 GMT), spot gold rose by 1% to $2,369.49 per ounce, while U.S. gold futures for June delivery settled 1.5% higher at $2,375.00 per ounce.
The rally in gold prices was sparked by Thursday’s revelation of a larger-than-anticipated increase in weekly claims for state unemployment benefits. Analysts suggest that while technical factors are driving much of the gold buying, recent employment data is providing additional support.
Phillip Streible, chief market strategist at Blue Line Futures, noted, “Concerns about the employment situation are oftentimes the first crack in the economy and could pull forward the Fed’s first interest rate cut.”
Market sentiment is leaning towards the Federal Reserve initiating an easing cycle in September, with lower interest rates making non-yielding assets like gold more attractive to investors.
Looking ahead, investors are eagerly awaiting the release of the U.S. producer price index and consumer price index data next week, both of which have the potential to significantly influence gold and silver prices. Jim Wyckoff, senior market analyst at Kitco, emphasized that any signs of hotter-than-expected inflation could dampen expectations of a near-term rate cut by the Fed.
In contrast, demand for physical gold in India, the world’s second-largest consumer, remained subdued due to near-record domestic prices, despite ongoing festivals. Spot silver experienced a slight decline to $28.27 per ounce, while spot platinum and spot palladium saw gains, rising to $997.40 per ounce and $977.75 per ounce, respectively.
