Gold Prices Rebound on Weaker US Jobs Data and Easing Inflation Concerns

Gold prices surged after weaker-than-expected US employment data and comments from Federal Reserve Chair Kevin Warsh suggesting inflation risks are beginning to ease. Spot gold rose 0.56% to close at US$ 4,029.58 per troy ounce on Wednesday, recovering from a two-day decline. The precious metal continued its upward momentum in early Thursday trading, reaching US$ 4,043.15 per troy ounce. The rebound was triggered by the ADP National Employment Report, which showed private payrolls increased by only 98,000 in June, falling short of the 118,000 forecast by economists polled by Reuters. Additionally, Warsh noted that inflation expectations and risks have diminished in recent weeks, though he reiterated the central bank’s commitment to bringing inflation down to the 2% target. The softer labour market data and easing inflation concerns led to a decline in US Treasury yields, boosting the appeal of non-yielding assets like gold. The rally comes as a relief for bullion investors after the metal suffered its worst quarterly performance in 13 years. Market participants are now looking ahead to the nonfarm payrolls report for further direction. According to the CME FedWatch Tool, markets are pricing in a 65% chance of a rate hike by the Federal Reserve in September. In geopolitical developments, the United States and Iran held technical talks in Doha on Wednesday aimed at ensuring safe passage through the Strait of Hormuz and securing a more permanent ceasefire.