Gold Prices Climb as Rate Cut Bets Strengthen, Focus Turns to U.S. Jobs Data

Gold prices surged in Asian trading on Friday, approaching key highs as expectations of Federal Reserve interest rate cuts gained momentum in anticipation of crucial nonfarm payrolls data due later in the day.

The precious metal was poised for weekly gains following a series of weak U.S. economic readings that have heightened expectations of a Fed rate cut in September, pushing the dollar to two-month lows.

Interest rate cuts by the Bank of Canada and the European Central Bank have also fueled optimism regarding looser monetary policy, which is generally favorable for metal markets.

Spot gold increased 0.5% to $2,386.55 an ounce, while gold futures for August delivery rose 0.6% to $2,405.40 an ounce. Spot gold is on track to add approximately 2.6% this week, bolstered by soft U.S. economic data, particularly in the labor market, further supporting the case for rate cuts.

Attention now shifts to the nonfarm payrolls data, due later on Friday, which is expected to provide more definitive insights into the labor sector and its impact on interest rate decisions.

This data release comes ahead of a Fed meeting next week, where the central bank is widely expected to maintain its current interest rates. However, any signals regarding monetary policy will be closely scrutinized, especially given the recent cooling of U.S. economic data.

Other precious metals also experienced gains on Friday, with platinum futures rising 0.3% to $1,014.40 an ounce and silver futures climbing 0.8% to $31.622 an ounce. However, platinum is down 2.6% for the week, while silver has surged nearly 4%.

In the industrial metals sector, copper prices remained subdued on Friday, still recovering from recent record highs. However, positive Chinese import data offered some support.

Benchmark copper futures on the London Metal Exchange fell 0.3% to $10,116.50 a tonne, and one-month copper futures dropped 0.4% to $4.6532 a pound.

Data released on Friday revealed that while overall imports to China grew less than expected in May, copper imports increased by 2.6% year-on-year. China’s exports also exceeded expectations, reflecting robust industrial output and strong overseas demand.