Gold Hinges on US Jobs Report as Rate Expectations Shift
Gold prices steadied at $4,477 an ounce on Friday, maintaining most of Thursday's gains as investors awaited the US jobs report. The data release could reshape expectations for the Federal Reserve's September meeting and influence interest rate decisions.
The metal jumped about 2% on Thursday after Fed Governor Christopher Waller signaled support for keeping rates unchanged if incoming inflation data continued to show progress. However, Friday's jobs report is a crucial test for gold, as the market has become sensitive to small shifts in rate expectations.
According to CME data, Fed funds futures imply roughly a 50% chance of a September rate increase, down from about 63% before Waller's remarks. Economists expect nonfarm payrolls to rise by around 56,000 in August, while unemployment is forecast to remain at 4.1%. A weaker-than-expected payrolls report could support gold by reducing the likelihood of another rate increase.
The World Gold Council reported that central banks bought a net 289 tonnes in the second quarter, up 62% from a year earlier and the strongest second-quarter total on record. Saxo Bank head of commodity strategy Ole Hansen noted that gold remains highly sensitive to changes in expectations for the September Fed meeting because policymakers are offering little firm forward guidance.