Gold surges after the morning’s soft U.S. jobs report. DG spot gold jumped $46.00 an ounce, while Gold futures rose back over $3400 an ounce. The yellow metal had been headed for a weekly loss early Friday on a stronger dollar and fading hopes for U.S. rate cuts.
U.S. nonfarm payroll growth for July was slower than expected while the unemployment rate rose, raising concerns for the U.S. labor market as President Donald Trump ramps up tariffs. Job growth totaled 73,000 for the month, missing meager Dow Jones estimate of 100,000. June and May totals were revised sharply lower, down by a combined 258,000 from previously announced levels. The unemployment rate rose to 4.2%, in line with the forecast.
Gold is also getting support from the latest tariff news. Late Thursday, U.S. President Donald Trump issued an order imposing global tariff rates effective Aug. 7 on more than 67 counties.
The order came after the latest U.S. inflation data, out Thursday, showed the cost of goods increased in June, adding pressure to the Federal Reserve to continue to hold interest rates unchanged. Investors were awaiting the release of the next key U.S. economic indicator, the monthly jobs report for July, on Friday for further direction. The Fed has said it closely watches both inflation and labor market data when setting monetary policy.
The central bank has held interest rates unchanged at 4.25% to 4.50% all year, most recently at a regular policy meeting on Wednesday, though it has been expected to begin rate cuts before the end of the year. Lower interest rates are typically bullish for gold, making it a more attractive alternate asset.
December gold futures slipped 0.1% Thursday to settle at $3,348.60 an ounce on Comex, and the front-month contract fell 1.3% in the first four days of the week. Bullion gained 1.2% in July after slipping 0.2% in June and losing 0.1% in May. It’s up 27% this year. The metal rose 27% in 2024, its biggest annual gain since 2010. The December contract is currently up $53.50 (+1.60%) an ounce to $3402.10 and the DG spot price is $3349.80.
The countries affected by Trump’s tariff order will still have a chance to negotiate down levies of between 15% and 41% on goods shipped to the U.S. until the they go effect. Markets have been closely responding to Trump’s tariffs policies because of fears about their impact on the economy. The Fed has also said it’s watching for any impact on inflation.
The Fed’s favorite inflation measure, the personal consumption expenditures price index, picked up in June, rising 2.6% from a year earlier, data released Thursday showed. Core PCE, which excludes volatile food and energy prices, was up 2.8% from a year earlier. Both figures were up from May’s 2.4% headline number. The Fed’s inflation target is 2%. Data Thursday also showed that consumer spending also increased, typically a positive sign for the economy.
The Fed’s decision this week to keep interest rates unchanged wasn’t unanimous, with two of Trump’s appointees to the central bank voting to cut them. Policymakers said economic growth moderated in the first half of the year and that inflation remained “somewhat elevated.” In comments after the decision, Fed Chairman Jerome Powell said the economy wasn’t behaving as if interest rates were holding it back. Trump has repeatedly criticized Powell and Fed policymakers for keeping interest rates unchanged this year.
More than half of the investors tracked by the CME FedWatch Tool are now betting that the Fed will hold rates at current levels at its next policy meeting in September. That’s a switch from a week ago, when 60.8% of investors were betting on a rate cut that month. Most now anticipate a one in October. There are only three scheduled meetings left this year, in September, October and December.
The central bank began raising interest rates in March 2022 to fight inflation, ultimately imposing increases of by 5.25 percentage points before beginning rate cuts last year.
Front-month silver futures lost 2.7% Thursday to settle at $36.71 an ounce on Comex, and the most-active September contract fell 4.3% in the first four days of the week. Silver rose 1.5% in July after increasing 9.5% in June and adding 0.6% in May. It rose 21% in 2024. The September contract is currently up $0.258 (+0.70%) an ounce to $36.970 and the DG spot price is $37.04.
Spot palladium decreased 2.8% Thursday to $1,206.00 an ounce and is down 1.7% so far this week. Palladium rallied 8.8% in July after surging 14% last month and advancing 2.8% in May. Palladium dropped 17% last year. The DG spot price is currently up $10.70 an ounce to $1211.00.
Spot platinum fell 5% Thursday to $1,293.30 an ounce and is down 7.9% so far this week. It dropped 3.9% in July after climbing 27% in June and rising 8.6% in May. Platinum lost 8.4% in 2024. The current DG spot gold is up $5.50 an ounce to $1303.60.
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