Global gold prices are heading towards a rise for the second consecutive week

What’s happening:-

Gold prices rose sharply as investors assessed the latest nonfarm payrolls (NFP) data from the US.

What happened:-

Weaker-than-expected jobs data for July triggered speculations of interest rate cuts by the Federal Reserve.

Fresh tariff-related announcements by US President Donald Trump also boosted demand for the safe-haven bullion.

Why it matters:-

The Labor Department’s Bureau of Labor Statistics released its NFP report that showed weaker-than-projected job growth in July. Nonfarm payrolls rose by 73,000 in July, following a 14,000 gain in the previous month. Markets were expecting job growth of 110,000 last month.

Global gold prices rose

The US unemployment rate edged higher to 4.2% in July, from 4.1% in the previous month, in-line with market estimates. Average hourly earnings for all employees on private nonfarm payrolls climbed by 0.3% to $36.44 in July, compared to June’s 0.2% gain.

The latest data followed stronger-than-expected PCE inflation, highlighting persistent pricing pressures and complicated the Federal Reserve’s policy decision.

Last week, the Federal Reserve had kept its benchmark interest rates unchanged in the 4.25%-4.50% range. The Fed Chairman Jerome Powell said that no decision had been made about September.

Investors widely expect two rate cuts by yearend, starting next month. Being a non-yielding asset, gold generally rises in a low-rate environment.

Global gold prices are heading upwards

Donald Trump announced higher tariffs on exports from several trading partners, including Canada, India and Brazil, which weighed on global markets, lending further support to the safe-haven gold, which performs well amid economic and geopolitical uncertainty.

Weakness in the US dollar also provided a further boost to gold prices as a lower greenback makes metals cheaper for foreign currency holders. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell 1.3% to 98.69 on Friday.

US gold futures gained 1.5% to settle at $3,399.80 an ounce on Friday. The yellow metal ended the week with gains. Gold extended gains this morning, with prices rising around 0.1%.

In other metals trading, silver prices also rose to $36.929 an ounce on Friday, while copper surged to $4.4355, platinum settled at $1,316.9 and palladium closed at $1,218.10.