Gold Price Movement
On Wednesday, spot gold increased modestly by 0.6% to close at $4,031.29 per ounce, while gold futures rose 0.2% to $4,044.60 per ounce. This uptick followed a sharp quarterly decline, with spot gold down 14.3% in Q2 and a 7.2% drop for the first half of the year – the worst quarterly performance in 13 years.
Oil, Inflation and Rate Expectations
A slide in oil prices back to pre‑Iran‑war levels helped ease inflationary pressures. The lower oil backdrop, combined with heightened expectations of U.S. interest‑rate hikes driven by recent economic data, moderated the earlier downward pressure on gold.
Federal Reserve Commentary
Federal Reserve Chair Kevin Warsh, President Donald Trump’s pick to succeed Jerome Powell, delivered his first public remarks at an ECB forum in Sintra, Portugal. Warsh again refused to provide forward guidance on interest rates, stating the FOMC was prepared for a “good family fight” at its July meeting, but noted that “inflation risks” had “come down.” He also hinted that the Fed might abandon traditional policy road‑signs for markets. The CME FedWatch tool indicated that traders still expect possible rate hikes this year, contributing to bond sell‑offs and higher U.S. Treasury yields, which typically weigh on non‑yielding assets such as gold.
U.S. Labor Market Data
Challenger, Gray & Christmas reported 45,849 U.S. job cuts in June, a 53% decline from May’s 97,006 layoffs and the lowest monthly total since December 2025. ADP announced that private employers added 98,000 jobs in June, below the consensus forecast of 118,000 and down from May’s 122,000. These figures arrived a day after a strong reading for job openings, which hit a two‑year high in May, and just before the widely‑anticipated June non‑farm payroll report. The Federal Open Market Committee (FOMC) last month emphasized its focus on the inflation component of its dual mandate, noting that the labor market remained robust.
ISM Manufacturing Data
The Institute for Supply Management’s headline manufacturing PMI slipped to 53.3 in June from 54 in May, missing the consensus estimate of 53.8. However, the gauge tracking monthly changes in raw‑material costs paid by manufacturers fell sharply to 73 in June from 82.1 in May, indicating easing cost pressures.
World Gold Council Outlook
The World Gold Council (WGC) described the second half of the year as “pivotal” for gold, citing geopolitical risks, fluctuating rate expectations, and strong investor positioning. Juan Carlos Artigas, global head of research at the WGC, emphasized that gold’s performance is driven by global demand from central banks, institutional investors, and consumers, not by a single factor. The WGC projected that, assuming at least one Fed rate hike in 2026 (likely by October), parallel tightening by the Bank of England, Bank of Japan, and European Central Bank, and U.S. inflation peaking near 3.9% in Q2, gold could trade within ±5% of approximately $4,100 per ounce through year‑end.
Middle East Oil and Technical Talks
Oil prices on Wednesday returned to levels observed just before the onset of the Middle East conflict, following U.S. statements about progress in indirect technical talks with Iran in Qatar. Negotiators from Qatar and Pakistan met with U.S. and Iranian representatives in Doha, achieving “positive progress” on issues related to the memorandum of understanding signed last month. U.S. Vice President JD Vance noted that discussions included details such as commercial traffic through the Strait of Hormuz, where Kpler data showed 34 verified vessel crossings on Monday, indicating steady traffic.
Summary of Key Figures
- Spot gold: $4,031.29/oz (+0.6%)
- Gold futures: $4,044.60/oz (+0.2%)
- Q2 spot gold decline: 14.3%
- H1 spot gold decline: 7.2%
- Oil price: back to pre‑Iran‑war levels (specific price not disclosed)
- Job cuts in June: 45,849 (‑53% MoM)
- ADP private‑sector jobs added: 98,000 (below forecast)
- ISM PMI June: 53.3 (below consensus)
- Raw‑material cost index: 73 (down from 82.1)
- WGC price projection: $4,100/oz ±5% by year‑end