Gold Tops $4,400 as Weak ADP Employment Fuels Rate Cut Bets

The US ADP private-sector employment report for August revealed only a 38,000 increase, far below the expected 47,000 to 48,000. This weaker-than-expected data sent market concerns over a slowing labor market soaring, dampening expectations for a hawkish rate hike by the Federal Reserve at its September meeting.

The result was a pullback in the US Dollar Index and US Treasury yields, while safe-haven and inflation-hedge assets saw short-term buying. This led to precious metal markets rebounding from losses, with spot gold rising 0.5% to break above $4,400/oz and temporarily trading at $4,406.89.

Silver prices jumped in tandem, surging past $65/oz and reaching a temporary price of $65.59. The rally was driven by expectations that the Federal Reserve may pause rate hikes or even enter a rate-cutting cycle if the non-farm payroll data on Friday fails to meet market expectations.