Gold prices fell in European trading on Thursday for the first time in four sessions, retreating from a one-week high amid profit-taking and technical correction activity. The decline came under pressure from the continued recovery of the US dollar in foreign exchange markets.

The dollar remains on an upward path, rebounding from its lowest levels in over three years as investors resumed buying from lower levels ahead of the US jobs report for June, due later today, before the July 4 holiday.

The Federal Reserve relies heavily on such data to guide its monetary policy decisions, and the outcome is likely to influence current expectations around potential rate cuts this year.

Price Overview

Gold prices fell by 0.45% to $3,342.03, down from the session’s opening level of $3,357.58, after hitting a one-week high of $3,365.76 earlier in the session.

On Wednesday, gold rose 0.6% at settlement, notching a third consecutive daily gain following weak US private payrolls data.

US Dollar

The US dollar index rose 0.15% on Thursday, marking its second straight daily gain as it continued to recover from a three-year low at 96.38 points, reflecting broader strength across major and minor currency pairs.

Beyond technical buying, the dollar was supported by optimism surrounding a trade deal between the United States and Vietnam ahead of the July 9 tariff deadline.

President Donald Trump announced on Wednesday that Vietnam had reached a trade agreement with the US, a move he said could prompt other countries to follow suit.

Though details remain limited, Trump said Vietnamese goods would face a 20% tariff, while transshipped goods from third countries through Vietnam would be subject to a 40% tariff.

Chhanana of Saxo Bank said it’s now important to monitor China’s response, given that the move directly targets goods rerouted via Vietnam. He added this signals a clear restructuring of global supply chains, with further disruption likely.

US Interest Rates

Fed Chair Jerome Powell said tariffs have shifted the Fed’s outlook on the timing of future rate changes.

Data released Wednesday showed that US companies shed jobs in June for the first time since January 2022, prompting traders to adjust their expectations for a Fed rate cut.

According to the CME FedWatch Tool, the probability of a 25-basis-point rate cut at the July meeting rose from 20% to 25%, while the likelihood of no change fell from 80% to 75%.

Expectations for a September rate cut also rose from 93% to 95%, while odds of rates staying unchanged dropped from 7% to 5%.

US Jobs Report

Markets are now looking to today’s official monthly jobs report from the US Labor Department, which will include key figures such as non-farm payroll additions, unemployment rate, and average hourly earnings.

At 13:30 GMT, non-farm payroll data is expected to show the US economy added 111,000 jobs in June, down from 139,000 in May. The unemployment rate is forecast to rise to 4.3% from 4.2%, while average hourly earnings are seen increasing by 0.3%, down from the previous 0.4% rise.

Gold Outlook

Kelvin Wong, market analyst for Asia-Pacific at OANDA, said gold appears to be consolidating between $3,320 and $3,360 as the market adopts a wait-and-see approach ahead of the NFP data and ISM Services PMI, rather than entering large positions.

Wong added that the Vietnam trade deal has likely already been priced in, and the market’s main focus now is on unresolved agreements with larger economies.

SPDR Gold Trust

Holdings in the SPDR Gold Trust, the world’s largest gold-backed ETF, fell by 0.57 metric tons on Wednesday, marking a third straight daily decline. Total holdings now stand at 947.66 metric tons, the lowest level since June 18.

The euro declined in European markets on Thursday against a basket of global currencies, extending losses for the second consecutive session against the US dollar. The euro moved further away from its highest level in four years, pressured by continued profit-taking and corrective movement.

The US dollar continued to recover from its lowest levels in more than three years, supported by bargain hunting and ahead of the June jobs report due later today, before the Independence Day holiday in the United States.

This week’s key inflation data from Europe has increased uncertainty surrounding a possible interest rate cut by the European Central Bank in July, as investors await more economic indicators from the eurozone.

Price Outlook

The euro fell against the dollar by 0.1% to $1.1786, down from the day’s opening price of $1.1798, after reaching a high of $1.1810.

The euro closed Wednesday down 0.1% against the dollar, marking its first daily loss in ten sessions, as traders booked profits from the four-year high of $1.1830.

The US Dollar

The US Dollar Index rose by 0.15% on Thursday, extending gains for a second straight session, as the greenback continued to rebound from its three-year low of 96.38. The move reflected ongoing strength in the dollar against major and minor currencies.

In addition to bargain buying, the dollar was buoyed by optimism following a new trade agreement between the United States and Vietnam, which renewed hopes for more deals ahead of the July 9 tariff deadline.

President Donald Trump announced Wednesday that Vietnam had signed a trade agreement with the US, and suggested that other nations might follow suit.

Despite limited details, Trump stated that Vietnamese goods would face a 20% tariff, while goods transshipped through Vietnam from third countries would be subject to a 40% tariff.

Chinana from Saxo Bank noted that all eyes are now on China’s response, as the move directly targets transshipped goods with a higher tariff. He added that this is a clear sign of global supply chains being restructured and warned of potential further disruptions ahead.

US Jobs

Global financial markets are closely watching the US Labor Department’s June employment report, scheduled for release on Thursday ahead of the July 4th holiday.

Data released on Wednesday showed that US companies shed jobs in June for the first time since January 2022, prompting traders to adjust expectations for the timing of a potential Fed rate cut.

According to CME Group’s FedWatch tool, the probability of a 25-basis-point rate cut at the July meeting rose from 20% to 25%, while the likelihood of holding rates steady declined from 80% to 75%.

European Interest Rates

The overall Consumer Price Index in Europe rose by 2.0% year-on-year in June, matching market expectations, after a 1.9% increase in May.

According to Reuters sources, a clear majority at the latest European Central Bank meeting favored keeping rates unchanged in July, with some members calling for a longer pause.

Money markets currently price in a 30% chance of a 25-basis-point rate cut by the ECB in July.

The Japanese yen declined in Asian markets on Thursday against a basket of major and minor currencies, extending losses for the second consecutive day against the US dollar. The yen moved further away from its highest level in four weeks amid continued profit-taking and corrective movement.

The US dollar, meanwhile, continued to recover from its lowest levels in more than three years, supported by renewed buying interest from lower levels and ahead of the June employment report due before the Independence Day holiday in the United States.

Expectations for a potential interest rate hike by the Bank of Japan in July have diminished following its latest meeting, with markets awaiting further economic data on inflation, wages, and unemployment in the world’s third-largest economy.

Price Outlook

The dollar rose against the yen by 0.2% to ¥143.91 on Thursday, up from the opening price of ¥143.64, after hitting a session low of ¥143.44.

The yen lost 0.2% against the dollar at Wednesday’s close, marking its first daily loss in three sessions, as traders locked in profits from the four-week high at ¥142.68.

The US Dollar

The US Dollar Index rose by 0.15% on Thursday, extending gains for a second session as the greenback continues to recover from a three-year low of 96.38. The rebound reflects sustained strength in the dollar against major and minor currencies.

Beyond bargain buying, the dollar gained further support from optimism surrounding a trade deal between the US and Vietnam, raising hopes of similar future agreements ahead of the July 9 tariff deadline.

President Donald Trump announced Wednesday that Vietnam had signed a trade agreement with the US, potentially encouraging other countries to follow suit.

Despite the lack of detailed information, Trump stated that Vietnamese goods would face a 20% tariff, while trans-shipped goods from third countries via Vietnam would be subject to a 40% rate.

Chinana from Saxo Bank noted that attention now shifts to China’s response, given the direct targeting of trans-shipped goods with the higher tariff. He added that this move signals a clear reshaping of global supply chains, with the potential for further disruption ahead.

US Jobs

Global markets are closely watching the US Labor Department’s June jobs report, set for release on Thursday ahead of the July 4th holiday.

Data released Wednesday showed that US companies shed jobs in June for the first time since January 2022, prompting traders to adjust their expectations regarding the timing of potential Fed rate cuts.

Following the report, CME’s FedWatch tool indicated that the probability of a 25 basis point rate cut in July rose from 20% to 25%, while the odds of maintaining current rates dropped from 80% to 75%.

Japanese Interest Rates

Expectations for a 25-basis-point rate hike by the Bank of Japan in its July meeting remain below 40%.

Investors are awaiting further data on inflation, unemployment, and wage growth in Japan before reassessing the likelihood of a rate move.

Soybean prices rose on Wednesday amid technical buying on the Chicago Board of Trade and bargain hunting activity.

Initial open interest rose by 15,303 contracts on Tuesday. No deliveries were issued overnight.

The national average cash soybean price (cmdtyView) rose by 7 cents to $9.88¾ per bushel. Soybean meal futures fell by $1.60 to $2.10 on the day, while soybean oil prices rose by 85 to 125 points.

An additional 927 July soybean meal contracts and 424 July soybean oil contracts were issued for delivery overnight. A fats and oils report released Tuesday afternoon showed that total soybean crush during May reached 203.7 million bushels, up 0.65% from April and 6.3% from the same month last year.

Total inventories stood at 1.876 billion bushels, down 5.06% from the previous month and 14.3% from May 2024. Brazilian soybean exports in June were estimated at 13.93 million metric tons, according to ANEC, up by 0.1 million tons from the prior estimate. StoneX estimated Brazil’s soybean crop at 168.75 million metric tons, an increase of 0.5 million from the previous forecast.

Corn

As for trading, December corn futures rose 2.8% at the close to $4.33 per bushel.

Soybeans

November soybean futures settled up by less than 2% to $10.48 per bushel.

Wheat

September wheat futures rose 2.9% at the close to $5.64 per bushel.