Gold Prices Rebound on Weaker US Jobs Data and Easing Inflation Concerns
Gold prices surged following US employment data that came in weaker than anticipated, alongside statements from Federal Reserve Chair Kevin Warsh indicating that inflation risks are beginning to subside.
According to Refinitiv, gold prices closed at US$4,029.58 per troy ounce on Wednesday (1/7/2026), marking a 0.56% increase. This strengthening provides much-needed relief after gold prices had fallen by 2% over the previous two consecutive days.
As of Thursday (2/7/2026) at 06:01 WIB, gold prices stood at US$4,043.15 per troy ounce, an increase of 0.37%. Spot gold rose after hitting its lowest level since November the previous day. The precious metal also recorded its worst quarterly performance in 13 years as of June 2026.
“Gold recorded a fairly good increase this morning. The lower-than-expected ADP data acted as a trigger, combined with comments from Fed Chair Kevin Warsh that inflation is starting to decrease, causing bond yields to fall and lifting the previously sluggish gold market,” said independent analyst Tai Wong to Reuters.
According to Wong, gold has likely formed a short-term price floor, unless the non-farm payrolls report on Thursday is significantly stronger than expected.
Ahead of the release of non-farm payrolls data, the ADP report showed that US private sector employment grew by 98,000 in June, down from an increase of 122,000 in May. This figure was also lower than the projection by economists in a Reuters poll, which anticipated an increase of 118,000 jobs.
On the other hand, Warsh stated that inflation expectations and inflation risks have decreased in recent weeks, while reaffirming the Fed’s commitment to bringing inflation down to the 2% target.
Although gold is often viewed as a hedge against inflation, rising interest rates typically reduce the appeal of the precious metal because it does not provide a yield.
Based on the CME FedWatch Tool, market participants now estimate approximately a 65% probability that the Fed will raise interest rates in September.
Regarding geopolitics, the United States and Iran held technical talks in Doha on Wednesday to reach an agreement regarding the smooth passage of shipping through the Strait of Hormuz and to secure a more permanent ceasefire, according to an Iranian official.