Gold Soars as Weak US Jobs Data Boost Rate-Cut Hopes
The near-term outlook for gold has turned increasingly constructive as weak US jobs data lifted rate-cut hopes, analysts say.
A weaker-than-expected July US labour market report has strengthened expectations of a softer Federal Reserve policy stance, while a weaker US dollar and lower Treasury yields have added to bullion's appeal.
Manav Modi, Commodities Analyst at Motilal Oswal Financial Services, said gold was set for its strongest weekly performance since late January, supported by the softer dollar, declining crude prices, and reduced expectations of a near-term Fed rate hike.
The weak labour-market data pushed US Treasury yields lower and the dollar to a seven-week low, creating a favourable backdrop for non-yielding assets such as gold. Gold subsequently climbed to a seven-week high, gaining more than 8% during the week.