Gold and Silver Stumble as Robust US Jobs Data Offset Trade and Fed Uncertainty

Gold prices took a hit on Thursday, July 24, 2025, sliding over 0.50% during the North American session as strong US labor market data overshadowed weakening manufacturing activity and lingering trade concerns. Trading at $3,373 after peaking at $3,393, the XAU/USD pair reflected a tug-of-war between bullish safe-haven demand and pressures from rising US Treasury yields. With US President Donald Trump’s visit to the Federal Reserve looming at 20:00 GMT and tariff talks with the EU, Canada, and Mexico heating up, gold’s trajectory remains precarious, caught between economic resilience and geopolitical risks.

Silver, on the other hand, is struggling to hold its ground at $39 an ounce, but after seven years of supply deficits, the precious metal remains in a solid uptrend.

The US economy sent mixed signals that shaped gold’s decline. The Bureau of Labor Statistics reported Initial Jobless Claims dropping to 217,000 for the week ending July 19, surpassing expectations of 227,000 and marking the lowest level since mid-April. This resilience in the labor market reinforced expectations that the Federal Reserve will hold rates steady at 4.25%-4.50% during its July 29-30 meeting, with markets pricing in just a 4% chance of a 25-basis-point cut. However, Continuing Claims held near a 2021 peak of 1.96 million, signaling challenges in re-employment. Meanwhile, the S&P Global Manufacturing PMI fell to 49.5 in July, down from 52.0 and below forecasts of 52.5, indicating a contraction in factory activity. In contrast, the Services PMI surged to 55.2, beating expectations of 53.0, highlighting robust service-sector growth. These divergent trends pressured gold, as rising 10-year Treasury yields at 4.416% and real yields at 2.046% increased the opportunity cost of holding non-yielding assets like bullion.

Global trade developments added complexity to gold’s outlook. A recent US-Japan trade agreement eased tensions, but negotiations with the EU, Canada, and Mexico remain fraught, with Trump threatening tariffs above 30% if reciprocal market access isn’t granted. Reports of a potential US-EU deal with a 15% baseline tariff were downplayed by the White House, keeping uncertainty high as the August 1 deadline approaches. Such tensions typically bolster gold’s safe-haven appeal, but the strong US Dollar Index (DXY), up 0.17% at 97.37, and improving risk sentiment capped gains. The European Central Bank’s decision to maintain rates at 2.00% on Thursday, coupled with a high bar for September cuts, further tempered expectations of global monetary easing, weighing on gold prices.

Trump’s visit to the Federal Reserve intensified market focus. His criticism of Fed Chair Jerome Powell and the bank’s $2.5 billion renovation project has fueled concerns about central bank independence, a factor that could drive safe-haven demand for gold if political pressures escalate. Investors are also eyeing Friday’s Durable Goods Orders data for further clues ahead of the Fed’s decision.

Technically, gold remains confined within a $3,350-$3,400 range, with sellers holding the upper hand below $3,400. A break below $3,350 could signal further declines, while a fresh catalyst, such as trade disruptions or Fed policy shifts, could reignite bullish momentum. As markets navigate these crosswinds, gold’s path hinges on the interplay of economic data, trade outcomes, and political developments.