Spot gold slipped 0.1% to $3,368.61 an ounce, while August gold futures edged down 0.2% to $3,382.65/oz by 05:18 GMT. Despite the minor pullback, gold remains up 2.4% this week, supported by increasing safe-haven demand and expectations of a dovish Federal Reserve stance.
Gold Gains on Weaker U.S. Economic Data
Investor appetite for gold strengthened after Wednesday’s release of ADP private payrolls data, which showed the U.S. added just 37,000 jobs in May—sharply missing expectations and indicating further labor market softening. This follows a trend of underwhelming economic indicators pointing to cooling momentum in the U.S. economy.
Markets are now focused on Friday’s highly anticipated Nonfarm Payrolls (NFP) report, which is also expected to show a decline in job creation. The combination of weak data is reinforcing speculation that the Federal Reserve will cut interest rates again later this year, possibly as soon as September.
Trade Policy Uncertainty and Geopolitical Risk Support Gold
Gold’s safe-haven appeal was further bolstered by trade-related jitters. U.S. President Donald Trump doubled tariffs on steel and aluminum this week and signaled his intention to continue a hardline trade policy despite mounting legal opposition. A key deadline for global trading partners to present updated trade offers passed without new agreements, fueling market unease.
Attention is now shifting to a potential phone call between Trump and Chinese President Xi Jinping, which could influence market sentiment. However, neither Washington nor Beijing has confirmed a date or agenda for the call, adding to the climate of uncertainty.
Meanwhile, rising military tensions in Eastern Europe continue to offer support for gold. Reports of Ukrainian drone strikes on Russian airbases have raised fears of renewed conflict escalation. Russian President Vladimir Putin expressed skepticism about a ceasefire, while Trump indicated that Putin “will have to respond” to recent attacks, raising the geopolitical risk premium.
Dollar Weakness Supports Broader Metal Prices
A weaker U.S. dollar also helped buoy metal prices this week. The greenback was down 0.4% so far and hovered near a six-week low, making dollar-denominated commodities like gold more attractive to international buyers.
Despite Thursday’s slight decline, metals maintained a strong weekly performance:
Silver futures were flat at $34.640/oz, up nearly 5% this week.
Platinum futures rose 0.3% to $1,089.65/oz, up over 3% on the week.
Copper futures edged lower, with London copper at $9,631.75/ton and U.S. copper down 0.2% at $4.8890/lb.
Outlook: Traders Cautious Ahead of NFP, Fed Commentary
Investors are likely to remain cautious until Friday’s NFP report and upcoming speeches from several Federal Reserve policymakers, which could shape expectations for the central bank’s next move. The gold market will also closely watch developments in U.S.-China trade relations and the evolving situation in Ukraine.
Gold remains fundamentally supported by a mix of slowing U.S. economic growth, trade uncertainty, and elevated geopolitical risks. However, short-term direction will depend on key macroeconomic signals and policy developments in the days ahead.
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