Gold Soars, Fed Forced to Intervene
Gold prices surged nearly 2% on Friday evening, breaking through $3,350 per ounce. This increase was triggered by a US employment report that fell far short of expectations, reinforcing speculation that the Federal Reserve will cut interest rates in September. The market now rates a 75% chance of a rate cut, up sharply from 45% before the data was released.
Data from the US Department of Labor showed only 73,000 jobs were added in July, far below analysts' projections of 100,000. Furthermore, employment data for May and June were also revised down significantly. These figures confirm that the US labor market is cooling, giving the Fed room to ease monetary policy.
The rise in gold prices occurred despite the release of Personal Consumption Expenditures (PCE) inflation data the day before, which showed persistently high price pressures. This situation creates a dilemma for the Fed: on the one hand, inflation remains strong, while on the other, the labor market is weakening. This combination has made the market increasingly confident of an imminent interest rate cut.
Meanwhile, US President Donald Trump reaffirmed his plan for a 10% base global tariff and added tariffs of up to 41% for countries that do not yet have a trade agreement with the US. He also announced a special 40% tariff on goods suspected of being routed through third countries in an attempt to circumvent existing tariffs. This policy has added to global uncertainty, prompting investors to increasingly seek safe-haven assets like gold. (ayu)
Source: Newsmaker.id
