Gold prices rallied nearly 2% on Friday, reversing earlier-week losses, as weaker-than-expected US payroll figures reignited expectations of a Federal Reserve rate cut. The surprise data, coupled with fresh tariff concerns, boosted demand for the precious metal as a safe-haven asset.
Spot gold rose 1.8% to AUD $3,348.31 per ounce, as of late trading, while US gold futures climbed 1.6%, pushing back above the critical $3,400 mark.
Earlier in the week, gold had been under pressure after the Fed opted to keep interest rates unchanged and US economic indicators initially pointed to resilience. However, Friday’s Labor Department report showed July nonfarm payrolls missing forecasts, signalling a possible slowdown in the US job market.
According to Bart Melek, Head of Commodity Strategy at TD Securities:
“The payroll numbers were slightly better than market sentiment had priced in, but still below expectations. This increases the likelihood of the Fed cutting rates later this year.”
A fresh Reuters poll now suggests that traders are pricing in two rate cuts by the end of 2025, with the first expected as early as September.
Fed Chair Jerome Powell, speaking earlier in the week, acknowledged potential inflationary risks tied to new tariffs and wages. However, he also cautioned that cutting rates too soon might jeopardise the central bank’s 2% inflation target.
“We’ve got inflation pressures from tariffs and wages, but disappointing jobs numbers,” Melek told Reuters. “If the Fed decides to cut, that will likely have a strongly positive impact on gold.”
So far this year, gold has gained around 25%, driven by monetary policy uncertainty, shifting trade dynamics, and heightened geopolitical tensions — all of which continue to bolster its role as a trusted store of value.
For investors and bullion buyers, the latest price action confirms gold’s resilience and reinforces the case for strategic accumulation ahead of potential monetary easing.
