Gold climbs ahead of US payrolls data
Gold prices rose in European trade on Friday, resuming gains and approaching a four-week high once more, on track for a weekly profit.
The gains are curbed by the stronger dollar ahead of crucial US payrolls data later today.
The Fed depends on such data to decide on future monetary policies and interest rate decisions.
The Price
Gold prices rose 0.7% to $3375 an ounce, with a session-low at $3352.
On Thursday, the precious metal lost 0.55% on profit-taking away from a four-week high at $3403.
Weekly Trades
Gold prices are up 2.65% so far this week, on track for the second weekly profit in three weeks.
US Dollar
The dollar index rose 0.15% on Friday on track for the first profit in three sessions away from a six-week trough at 98.35 against a basket of major rivals.
The dollar is boosted as US-China trade tensions receded following the Trump-Xi phone call.
US Rates
Earlier US data showed the services sectors shrank for the first time in a year, while the private sector added far less jobs than expected last month.
According to the Fedwatch tool, the odds of a Fed 0.25% June interest rate cut stood at 2%, while the odds of a July rate cut stood at 24%.
Now traders expect 50 basis points of US rate cuts overall this year, starting October.
Later today, the payrolls report will be released, expected to show the addition of 126 thousand last month, while unemployment is expected unchanged at 4.2%.
SPDR
Gold holdings at the SPDR Gold Trust remained unchanged yesterday at 935.65 tons, the highest since May 13.
Euro gives up six-week high on profit-taking
The euro fell in European trade on Friday against a basket of major rivals, giving up a six-week high against the US dollar on profit-taking.
Despite the losses, the common currency is about to mark a weekly profit after the European Central Bank hinted at a pause in the year-long cycle of policy easing.
The dollar rebounded ahead of the crucial US payrolls report later today, which would provide important clues on the odds of future Fed rate cuts.
The Price
The EUR/USD rose 0.1% today to $1.1433, with a session-high at $1.1457.
The euro closed up 0.25% on Thursday against the dollar, marking a six-week high at $1.1495 following the ECB’s policy meeting.
Weekly Trades
The euro is up 0.8% so far this week on the dollar, on track for the second weekly profit in three weeks.
The ECB
The European Central Bank cuts interest rates to three-year lows at 2.15%, the seventh such rate cut in a row
The ECB expects government investments in defense and infrastructure to boost growth in the medium term, even as trade uncertainties continue to cloud business investments and exports in the short term
It expects real GDP growth at 0.9% in 2025, and 1.1% in 2026, and 1.3% in 2027.
It also expects inflation at 2.0% in 2025, then 1.6% in 2026, and back to 2% in 2027
Lagarde
ECB President Christine Lagarde hinted at the possible end of the current cycle of policy easing, which was in response to a combined shock such as the Covid 19 pandemic, the Ukrainian war, and the energy crisis.
European Rates
According to a Reuters source, most ECB members now aim at holding interest rates unchanged in July, with the global markets now expecting just an additional 25 basis points of rate cuts by the end of the year.
US Dollar
The dollar index rose 0.15% on Friday away from six-week lows at 98.35 against a basket of major rivals.
The path of the dollar next week will likely be determined by the all important US payrolls report today.
Wall Street declines after Xi-Trump phone call
US stock indices fell on Thursday as the markets assess the latest economic data, and after news about US President Donald Trump’s phone call with his Chinese counterpart Xi Jinping.
China’s foreign ministry stated that Trump was the one who called Jinping to discuss bilateral relations.
Earlier US data showed the commodities and services deficit in April shrank 55.5% m/m, reaching $61.6 billion, the lowest since 2023.
Otherwise, US unemployment claims rose by 8 thousand last week to 247 thousand, while analysts expected a drop of 3 thousand.
On trading, Dow Jones fell 0.3% as of 15:20 GMT to 42314 points, while S&P 500 shed 0.2% to 5957 points, as the NASDAQ dipped 0.2% to 19,420 points.
Silver rallies to 13-year peak on haven demand
Gold prices maintained their stability on Thursday as investors awaited the crucial US payrolls report, while silver rose above $35 an ounce for the first time since October 2012.
Gold spot prices rose 0.6% to $3395 an ounce as of 11:47 GMT, while US gold futures rose 0.6% to $3419.
US President Donald Trump intensified his public pressures on Fed Chair Jerome Powell to cut interest rates, and compared the slow pace of the Fed to the rapid rate cuts by the ECB.
It comes especially after the abysmal ADP index, which showed far less job creation than expected in the private sector last month.
Silver surged 2.5% today to $35.83 an ounce, a 2012 high as investors flock to the white metal as a safe haven alongside gold.
Platinum prices rose 3.6% to $1123, the highest since March 2022, while palladium added 1.8% to $1018.
Trump stated on Wednesday that the government debt ceiling should be abolished, agreeing with Democratic Senator Elizabeth Warren on the issue.
Separately, the dollar index fell 0.4% as of 15:03 GMT to 98.4, with a session-high at 98.9, and a low at 98.3.