At 16:31 ET (20:31 GMT) on Thursday, spot gold surged 2.3% to $4,124.44 per ounce, while gold futures rose 1.4% to $4,137.65 per ounce. The rally followed a softer‑than‑expected June jobs report that dampened expectations of another Federal Reserve rate hike. Earlier in the week, gold had recorded its worst quarter since 2013, pressured by a stronger dollar, inflation concerns and elevated rate‑hike bets.
The U.S. labor market data showed mixed signals: May job openings hit a two‑year high, Challenger, Gray & Christmas reported a cooling in layoffs for June, and ADP’s private‑employment gauge slipped for the same month. The headline June employment report from the Bureau of Labor Statistics added just 57,000 non‑farm payroll jobs, far below the 114,000 consensus estimate and down from the downwardly revised 129,000 jobs recorded in May. Employment gains were seen in professional and business services, social assistance, and health care, while leisure and hospitality saw declines. Incorporating June’s figure, the three‑month average payroll growth stands at about 111,000 jobs, indicating an overall resilient labor market. The unemployment rate edged down to 4.2% in June after three months of a 4.3% plateau.
Federal Reserve officials noted that, with the labor market holding steady, the central bank’s focus remains on bringing inflation down. New Fed Chair Kevin Warsh reiterated at a central‑banking forum in Portugal that policymakers would drop forward guidance and highlighted that inflation risks have receded. Earlier oil‑price spikes, triggered by the U.S.–Israeli assault on Iran at the end of February, had lifted price pressures, but crude benchmarks have slid since mid‑June after Washington and Tehran signed an interim peace deal that reopened the Strait of Hormuz.
The softer jobs data shifted market expectations: the CME FedWatch tool showed a reduced probability of a June rate hike and an increased probability of rates remaining unchanged. Consequently, the U.S. dollar weakened and shorter‑end Treasury yields fell. Higher‑rate environments typically weigh on non‑yielding assets such as gold and bolster the dollar, which in turn makes gold more expensive for foreign buyers.
Ambar Warrick, Scott Kanowsky, and Jaiveer Shekhawat contributed to this article.