Gold prices moved higher on Thursday after weaker-than-expected U.S. employment data strengthened demand for the precious metal. Falling oil prices also supported the market by increasing investor interest in safe-haven assets.
After Asian markets opened, spot gold rose 0.7% to $4,057 per ounce. The metal reached its highest level since June 23, recovering from recent losses.
Gold prices had dropped to a seven-month low on Wednesday. However, sentiment changed after new figures showed slower job growth in the U.S. private sector than economists had expected. The weaker labor data increased expectations that the U.S. Federal Reserve could ease monetary policy if economic conditions continue to soften.
Investors have now shifted their attention to the official U.S. employment report, scheduled for release later today. The data could provide fresh signals about the Federal Reserve’s next interest rate decision and influence the direction of global financial markets.
Nicholas Frappell, Global Head of Institutional Markets at ABC Refinery, said investors have become more cautious about betting against gold at current price levels. He noted that the metal has repeatedly found strong support near recent lows, encouraging buyers to return to the market.
Frappell added that weaker private-sector employment figures have strengthened expectations that the official labor report may also disappoint. If confirmed, that could increase speculation about future interest rate cuts and provide additional support for gold prices.
According to the latest figures, the U.S. private sector created 98,000 jobs last month. That was below the 122,000 jobs recorded in May and weaker than market expectations.
Meanwhile, Federal Reserve Governor Kevin Warsh said inflation expectations have eased in recent weeks. However, he reaffirmed the central bank’s commitment to bringing inflation back to its long-term target of 2%.
Market analysts say investors will closely watch today’s employment report for further clues about the Federal Reserve’s policy outlook. Softer labor market data could strengthen gold further, while stronger-than-expected figures may limit additional gains.
