Gold remained above $4,300 per ounce on Thursday as weaker-than-expected U.S. employment data and easing tensions in the Middle East reduced market expectations for a Federal Reserve interest rate increase in September.
The most active Comex December gold contract traded at $4,301 per ounce as of 2:38 p.m. in New York, little changed after Wednesday’s 4% rally. The metal reached its highest level since June 17.
Gold has gained approximately 25% over the past year but remains around 23% below its record high near $5,600 reached in late January.
Weak jobs data supports gold prices
Gold received support after new U.S. employment data pointed to a softer labor market. ADP reported that private employers added only 44,000 jobs in July, below expectations of around 70,000.
The weaker hiring figures reinforced expectations that the Federal Reserve may have less pressure to tighten monetary policy ahead of Friday’s non-farm payrolls report.
Federal Reserve Governor Lisa Cook said Wednesday that she remains prepared to support higher interest rates if inflation does not continue to slow. However, she warned that policymakers may not have unlimited time to wait before bringing inflation back toward the central bank’s 2% target.
Middle East developments ease inflation concerns
Progress toward reopening the Strait of Hormuz has reduced concerns over energy-driven inflation, pushing oil prices down around 10% this week.
President Donald Trump said Washington and Iran had held “very good discussions” focused on a potential ceasefire and protecting shipping routes through the strategic waterway.
The decline in oil prices has lowered pressure on inflation expectations, supporting precious metals by reducing concerns that tighter monetary policy may be needed.
Gold mining stocks gain
Gold equities also moved higher. Agnico Eagle Mines rose 1.26% to $235.17 in Toronto, Newmont gained 1.09% to $105.38, and Barrick Mining increased 0.63% to $41.33.
Gold demand outlook remains mixed
Despite gold’s strong price performance, global demand showed signs of weakness. According to the World Gold Council, global gold demand declined to 942 tonnes in the second quarter, the lowest level since late 2021.
Investment demand roughly halved during the period, while gold-backed exchange-traded funds reduced their holdings by approximately 45 tonnes.
Central banks helped offset some of the decline by purchasing 289 tonnes of gold, around 1.6 times the level recorded a year earlier. Chinese institutional investors also continued increasing allocations to gold-backed funds amid volatility in technology stocks.
Silver retreats after recent gains
Silver declined 0.92% to $61.71 per ounce after briefly moving above $62 on Wednesday for the first time in seven weeks.
The metal remains significantly below its January record of $121.67.
Payroll report becomes key market catalyst
Friday’s U.S. payrolls report is expected to be the next major driver for precious metals.
A weaker-than-expected employment reading could strengthen expectations for easier monetary policy and provide additional support for gold prices. A stronger jobs report, however, could revive expectations of tighter Federal Reserve policy and put pressure on bullion.
