Gold prices edged lower on Thursday, pausing near AUD $5084.77 per ounce, despite continued weakness in the US Dollar. Investors had hoped the softening Greenback—now testing levels not seen since February 2022—would lift bullion, but stronger-than-expected US economic data has tempered any potential rally.
At the time of writing, XAU/AUD posted a slight decline of 0.05%, even as US Treasury yields fell and traders began pricing in up to two potential rate cuts by late 2025. Market sentiment, however, remains cautious.
The latest US jobs data showed unemployment claims came in lower than expected, indicating ongoing resilience in the labour market. Additionally, Durable Goods Orders for May beat forecasts by a significant margin, dampening hopes for an aggressive Fed pivot toward easing.
Meanwhile, the Q1 2025 US GDP figures confirmed a sharper-than-expected economic contraction, which typically would support gold. However, the mixed data leaves gold stuck in a narrow trading range.
In a political twist, the Wall Street Journal reported that former President Donald Trump is considering announcing his pick for the next Federal Reserve Chair as early as September or October, ahead of Jerome Powell’s term ending in 2026. The uncertainty around future Fed leadership is likely to increase volatility in currency and metals markets, including gold.
Several current Fed officials—including Boston Fed President Susan Collins, Richmond Fed President Thomas Barkin, and Governor Michael Barr—have recently reiterated Jerome Powell’s balanced tone on inflation and rates, contributing further to a cautious outlook.
Outlook for Gold Investors
For Australian gold investors, current price consolidation around AUD $5084.77 may present a buying opportunity, especially if rate cuts materialise or geopolitical uncertainty rises. However, short-term movements are likely to remain choppy, reflecting the push-pull between inflation data, Fed expectations, and political developments.
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