Gold Prices Drop Following Strong U.S. Employment Data
On Thursday, gold prices fell as better-than-expected U.S. employment data reinforced expectations that the Federal Reserve may not lower interest rates as soon as anticipated.
Key Market Movements
- Spot gold decreased by 0.9% to $3,328.63 per ounce, having dropped over 1% earlier.
- U.S. gold futures rose by 0.4% to $3,342.90 per ounce.
The job growth in June was robust, but nearly half of the non-farm payroll increase came from the public sector, and private sector wage growth significantly slowed. Industries such as manufacturing and retail trade are grappling with aggressive tariffs imposed by the Trump administration.
Market Expectations for Fed Interest Rate Cuts
Investors now anticipate the Fed to cut interest rates by 51 basis points by year-end, starting from October, compared to the previously expected 66 basis points before the report.
Non-yielding gold tends to perform well in a low-interest-rate environment.
Performance of Other Precious Metals
- Silver gained 0.7% to $18.44 per ounce.
- Platinum lost 3.1% to $1,374.89.
- Palladium declined 1.5% to $1,137.69.
Copper Also Declines Amid Strong U.S. Employment Data
Copper prices also fell as the U.S. dollar strengthened following the release of U.S. employment growth data.
The benchmark copper on the London Metal Exchange (LME) dropped 0.5% to $9,965 per tonne after reaching a three-month high of $10,020.50 the previous day.
The weakening of the U.S. dollar, which makes dollar-denominated metals cheaper for buyers using other currencies, has driven industrial metal prices higher this year.
Additional Influences on Copper Prices
Another significant factor influencing copper prices is the U.S. investigation into potential tariffs on red metal imports, used in energy and construction sectors. These tariffs could create shortages and drive up prices.
