Investors eye September Fed cut after jobs miss, but gold rally pauses as dollar steadies
Gold prices slipped Monday morning as investors took profits after a sharp rally, though expectations for a US Federal Reserve rate cut in September remained elevated amid disappointing US payrolls and rising geopolitical risks.
According to Reuters, spot gold eased 0.3 percent to US$3,354.17 per ounce as of 0229 GMT (Sunday night in Canada), after jumping more than 2 percent on Friday.
US gold futures rose 0.2 percent to US$3,407.10.
Friday’s rally followed a weaker-than-expected US jobs report that fuelled speculation of a rate cut next month.
As per the US Labour Department’s Bureau of Labor Statistics, nonfarm payrolls increased by only 73,000 in July, following a downwardly revised 14,000 in June.
This slowdown has prompted traders to price in an 81 percent probability of a cut in September, according to CME’s FedWatch tool.
Spot gold reached its highest since July 25 on Friday, climbing 1.8 percent to US$3,347.66 per ounce by 1:48 pm ET, after earlier gaining as much as 2 percent.
Over the week, bullion gained 0.4 percent.
Reuters reported that US gold futures settled 1.5 percent higher at US$3,399.80.
Tim Waterer, chief market analyst at KCM Trade, said gold made a “conservative start to the week” after Friday’s price jump. He attributed the marginal decline to a mix of profit-taking and dollar stabilisation.
Tim Waterer, chief market analyst at KCM Trade, said “Gold has made a conservative start to the week following Friday's price jump,” noting that profit-taking and a stabilising dollar contributed to the slight pullback.
Waterer also said that “with Trump on the tariff warpath once again, and the soft US jobs report increasing the odds that we could see a September FOMC rate cut, any pullbacks in the precious metal could be of a shallow nature.”
Last week, the US Federal Reserve kept interest rates steady at 4.25 percent to 4.50 percent.
Fed Chair Jerome Powell stated, “we haven't made any decisions about September.”
Melek said inflationary pressures from tariffs and wages persist despite disappointing job numbers.
“So in that situation, if the Fed cuts (rates), that's going to have material impact on gold in a positive way,” he said.
Safe-haven assets like gold tend to gain during economic and geopolitical uncertainty, particularly in low-interest environments.
As reported by Reuters, US President Donald Trump imposed new tariffs last week on exports from countries including Canada, Brazil, India, and Taiwan.
Trade Representative Jamieson Greer said the tariffs are expected to remain in place during negotiations, based on comments aired Sunday.
Other precious metals were mixed.
As of early Monday, spot silver declined 0.6 percent to $36.80 per ounce, platinum dropped 0.6 percent to $1,307.02, and palladium fell 0.9 percent to US$1,197.76.
On Friday, spot silver had risen 0.4 percent to US$36.88, platinum gained 1.2 percent to $1,304.91, and palladium increased 1.4 percent to US$1,208.05.
Despite Friday’s gains, all three metals ended the week lower.
