Gold prices remained close to a two-week high on Monday after weaker-than-expected US employment data reduced expectations of another near-term interest rate increase by the US Federal Reserve. The shift in market sentiment supported demand for bullion, although a stronger US dollar continued to limit further gains.
Spot gold traded at $4,174.66 per ounce by 0252 GMT after reaching its highest level since June 22 earlier in the session. Meanwhile, US gold futures for August delivery climbed 1.5% to $4,186.70 per ounce.
Market analysts said investors returned to gold as expectations for higher interest rates eased following signs of a cooling US labour market. Lower interest rates generally improve the appeal of gold because the precious metal does not generate interest income.
Why Gold Prices Are Holding Firm This Week
Investor sentiment shifted after US data released last week showed job growth slowed sharply in June. Payroll figures for the previous two months were also revised lower, suggesting the labour market is losing momentum.
As a result, traders reduced expectations of another Federal Reserve rate hike in the near term. According to the CME FedWatch Tool, markets now see around a 55% chance of a September rate increase, compared with more than 60% before the employment report was released.
This change has helped support gold after the metal ended a four-week losing streak with a weekly gain of more than 2%.
Stronger US dollar caps further gains
Despite the improved outlook for bullion, the US dollar edged 0.1% higher, making gold more expensive for buyers using other currencies.
Tim Waterer, chief market analyst at KCM Trade, said gold has regained stability as markets scale back expectations for further rate hikes, although continued strength in the dollar is limiting stronger price advances.
Investors are now waiting for the minutes from the Federal Reserve’s June 16–17 policy meeting, scheduled for release on Wednesday. The document could provide fresh insight into the central bank’s future monetary policy direction.
Outlook for precious metals
J.P. Morgan said demand from key sectors may not be as strong as previously expected, limiting further gains in gold prices this year. The bank forecasts gold could reach $4,300 during the third quarter and $4,500 in the fourth quarter.
Other precious metals traded lower during Monday’s session. Spot silver slipped 0.6% to $62.03 per ounce after touching its highest level since June 23 earlier in the day. Platinum eased 0.1% to $1,636.60, while palladium declined 0.2% to $1,271.75 per ounce.
For investors in Pakistan and around the world, attention now turns to upcoming Federal Reserve signals, which could determine whether gold extends its recent recovery or faces renewed pressure.
