Spot gold traded around $4,175 per ounce on Monday after posting a gain of more than 2% last week, ending a four-week losing streak. US gold futures also strengthened, reflecting renewed investor interest in bullion following signs that the US labour market is cooling.
The latest US jobs report showed payroll growth slowed sharply in June, while employment figures for the previous two months were revised lower. The weaker labour data prompted traders to reduce expectations of a September rate hike, with markets now assigning roughly a 55% probability, down from above 60% before the report. Lower interest rates generally support gold because the precious metal does not generate interest income, making it more attractive when borrowing costs ease.
Attention is now turning to the minutes of the Federal Reserve’s June 16-17 policy meeting, the first chaired by Kevin Warsh. Investors will closely examine the discussions for fresh guidance on inflation, economic growth and the future path of US monetary policy.
Despite the recent rebound, analysts believe gold’s upside could remain measured. JPMorgan expects demand from key sectors to be softer than previously anticipated and forecasts gold to average $4,300 per ounce in the third quarter and $4,500 in the fourth quarter.
Physical demand has shown mixed trends across Asia. Buying in India softened after prices recovered from recent lows, while demand in China improved modestly. Meanwhile, the World Gold Council reported that central banks added a net 41 tonnes of gold to their reserves in May, underlining continued official-sector demand.
Beyond gold, silver extended its rally for a fifth consecutive session, while platinum and palladium also advanced.
This week, traders will monitor US services PMI, trade data, weekly jobless claims and the release of the Fed meeting minutes, alongside inflation readings from the Eurozone, China, Japan and Germany. Analysts also expect geopolitical developments and fluctuations in crude oil prices to influence precious metals. With the US dollar and Treasury yields continuing to shape investor sentiment, gold is likely to remain highly sensitive to incoming economic data in the sessions ahead.
