Gold Holds, US Jobs Data a Trigger
Gold prices held firm in trading on Friday (July 3rd) after weak US jobs data reduced expectations for a Federal Reserve interest rate hike this year. Gold traded around US$4,130 per troy ounce after surging 2.3% in the previous session, its biggest daily gain in three weeks.
Gold's rally came after US jobs data showed hiring slowed sharply in June. This figure signals that the labor market is still facing pressure, despite having appeared quite strong in recent months.
The weak jobs data led the market to believe that the Fed is under less pressure to raise interest rates at its July meeting. Previously, high interest rate expectations had put significant pressure on gold because the precious metal does not provide a yield. Now, the swap market only estimates the chance of a rate hike at around 18%, down from around a third at the start of the week.
Positive sentiment for gold also came from falling oil prices. Oil prices, which have been a driver of inflation in recent months, have begun to fall to near pre-war levels. This occurred as tanker flows through the Strait of Hormuz increased and US-Iran talks in Qatar showed positive progress toward a more lasting peace.
However, the market is still closely monitoring the issue of the Fed's independence. US President Donald Trump is said to be continuing his efforts to reshape the central bank and is pushing for the removal of Fed Chair Lisa Cook. Concerns about political interference in the central bank could again support gold as a safe-haven asset.
At 8:00 a.m. Singapore time, spot gold edged up 0.1% to US$4,127.40 per troy ounce. Silver strengthened 0.3% to US$61.09 per troy ounce, while platinum and palladium also rose. Meanwhile, the Bloomberg Dollar Index moved slightly higher after weakening 0.5% in the previous session. (asd)*
Source: Newsmaker.id
