Gold advances on weaker dollar, US rate forecasts

Gold prices climbed on Monday amid a broad decline in the US dollar against most major currencies and growing expectations of a Federal Reserve interest rate cut.

Government data showed the US economy added 73,000 jobs in July, falling short of forecasts for 100,000 new jobs.

Figures for May and June were also sharply revised downward, with a total downward adjustment of 258,000 jobs compared to initial estimates. June’s numbers were revised to 14,000 from 147,000, while May was revised to 19,000 from 144,000.

The same report showed the US unemployment rate edged up to 4.2% last month from 4.1%, in line with market expectations.

In response to the data, former President Donald Trump questioned the reported decline in job growth and dismissed the head of the Bureau of Labor Statistics, accusing her of manipulating the numbers to undermine Republicans ahead of the elections.

Following these developments, the probability of a 25-basis-point rate cut at the Fed’s September meeting surged to 88%, up from 80% a day earlier and 63% a week ago, according to the CME FedWatch tool.

Separately, US Trade Representative officials said Sunday that the Trump administration is likely to keep in place the tariffs imposed last week on a number of countries, rather than rolling them back.

By 20:02 GMT, the US Dollar Index had fallen 0.4% to 98.7, with an intraday high of 98.9 and a low of 98.5.

As for gold trading, spot prices rose 0.9% to $3,430.8 an ounce by 20:03 GMT.