Spot gold rose 1.3% to $4,176.94 an ounce, heading for its first weekly gain since May as prices approached the $4,200 mark.
Softer US employment data and easing oil prices lowered expectations of another Federal Reserve rate hike, boosting demand for non-yielding assets like gold.
Silver climbed 2%, while platinum and palladium also advanced. Meanwhile, renewed debate over Federal Reserve independence added to investor demand for safe-haven assets.
Gold Heads for Best Week Since May as Fed Rate Hike Bets Fade
Gold moved closer to the $4,200-an-ounce mark as weaker-than-expected US jobs data and easing oil prices dampened expectations of further Federal Reserve rate hikes
Gold freepik.com
Summary
Advertisement
Spot gold advanced 1.3 per cent to $4,176.94 an ounce as of 2:31 p.m. in New York. The metal headed for its first weekly gain since May, climbing toward the $4,200 mark and gaining 2.2 per cent for the week, according to Bloomberg.
Soft US job numbers and lower energy prices have led investors to scale back bets on monetary policy tightening, which tends to be a headwind for non-yielding gold.
US hiring slowed sharply in June, showing the labour market still faces challenges despite recent signs of strength.
This soft employment data reduced expectations of a Federal Reserve interest rate increase. Swap traders downgraded the probability of a quarter-point rate hike at the next Fed meeting to less than 20 per cent, down from one-third earlier in the week.
Energy Slump Eases Inflation
Oil prices, a key driver of inflation at the beginning of the US-Iran conflict, recorded their largest quarterly decline since 2020 as tanker flows through the Strait of Hormuz recovered. Saudi Arabia and the United Arab Emirates are already shipping crude from the Persian Gulf at volumes nearing pre-war levels.
Advertisement
The drop in rate hike expectations led traders to cover short-gold positions established earlier, while reducing the incentive to liquidate long positions.
Fed Independence Under Pressure
President Donald Trump and his associates renewed a campaign to restructure the Federal Reserve after the Supreme Court blocked an effort to dismiss Governor Lisa Cook.
Senior officials and outside allies are exploring methods to remove members of the Federal Reserve Board of Governors to clear the path for the president's nominees, according to people familiar with the matter.
Previous challenges to central bank independence by the Trump administration boosted the gold rally in late 2025. This was part of the "debasement trade"—a strategy betting on rising inflation and expanding national debt in developed economies.
Broader Market Movements
Silver advanced 2 per cent to $62.42 an ounce, after gaining 5 per cent over the preceding three sessions. Platinum and palladium also rallied.
The Bloomberg Dollar Spot Index remained flat after ending the previous trading session down 0.5 per cent. Trading volumes remained light as most US financial markets closed for the public holiday.
Advertisement