Spot gold prices increased by 1.4% to approximately $4,182.28 an ounce, indicating a potential 2.3% weekly gain, the first since late May. This rise follows disappointing U.S. nonfarm payroll data, which revealed only 57,000 jobs added in June, significantly below the revised 129,000 in May and the 115,000 expected by analysts.
The market is now pricing a 53.5% chance of a Federal Reserve interest rate hike in September, down from 65% prior to the jobs report. The overall sentiment in the precious metals market improved, with spot silver rising 2.9% to $62.77 an ounce and platinum and palladium also seeing gains.
Analysts from OCBC expressed a cautiously constructive outlook on gold, suggesting that if U.S. economic data continues to suppress real yields and the dollar, gold could maintain its recovery. However, they cautioned that a more sustained recovery would require a significant easing of real yields, stabilization of investor demand, and a shift in the Fed's hawkish stance.
The backdrop of rising inflation concerns and a strong dollar has pressured gold prices this year, which are still down about 22% from their January peak of over $5,300. The volatility in precious metals, particularly following the U.S.-Iran war, has raised questions about gold's safe haven status, making the current rebound particularly noteworthy for investors