Gold Prices Hold Steady Amid U.S. Labor Data, Trade Tensions

• Spot Gold: $3,360.26 per ounce (unchanged)
• Gold Futures (December): $3,412.70 per ounce (up 0.2%)

Key Highlights:

1. Gold’s Recent Rally:
   • Gold prices saw a 2% jump on Friday, recovering from earlier losses, thanks to weaker-than-expected U.S. labor data and expectations for interest rate cuts by the Federal Reserve.
   • The U.S. nonfarm payrolls data for July showed a disappointing 73,000 jobs added, significantly below forecasts. The unemployment rate rose to 4.2%, heightening concerns about a slowing U.S. economy.
2. Impact of Rate Cuts:
   • The weak jobs data increased the probability of a rate cut by the Federal Reserve in September, with markets now pricing in a 90% chance of a reduction.
   • Lower interest rates make holding non-yielding assets like gold more attractive, boosting gold prices.
3. Trump’s Tariff Concerns:
   • Trade tensions under President Trump, especially sweeping tariffs on imports from countries like Canada, Brazil, India, and Taiwan, are driving investors towards safe-haven assets like gold.
   • Inflation fears and disruptions to global trade flows due to these tariffs further support gold’s haven appeal.
4. U.S. Dollar and Treasury Yields:
   • The U.S. Dollar Index fell 0.4%, contributing to gold’s gains, as a weaker dollar makes gold more attractive for holders of other currencies.
   • Lower Treasury yields also added to gold’s appeal.
5. Other Metals:
   • Platinum Futures rose 0.2% to $1,318.65/oz.
   • Silver Futures gained 0.6% to $37.15/oz.
6. Copper Market Pressure:
   • U.S. Copper Futures fell 0.7% to $4.42 per pound after a 20% drop last week.
   • Copper inventories at Comex warehouses are at their highest in 21 years, putting additional pressure on copper prices.

Gold prices are being supported by the soft U.S. jobs data, increased likelihood of rate cuts, and trade uncertainties. Despite a strong dollar and rising concerns over the impact of tariffs, gold remains a popular choice for investors seeking safety amidst a low-yield environment. Meanwhile, copper prices face pressure from inventory build-ups and tariff-related disruptions.