Gold prices rose in the European market on Friday, resuming gains that had paused yesterday amid profit-taking and correction moves, approaching once again their all-time highs and heading for a third consecutive weekly gain, supported by strong demand for the metal as the best alternative investment.

A series of weak data on the US labor market boosted expectations that the Federal Reserve will cut interest rates by 25 basis points at the September meeting to near full pricing.

To confirm this pricing, global financial markets await later today the release of the monthly US jobs report, which the Fed relies on heavily in determining the course of US monetary policy.

Price Overview

• Gold prices today: gold rose by 0.45% to $3,561.15, from an opening level of $3,545.88, recording a low at $3,540.22.

• On Thursday, prices fell by 0.4%, the first loss in eight days, amid profit-taking after hitting an all-time high of $3,578.61 per ounce on Wednesday.

Weekly Performance

Over the course of this week—ending officially at today’s settlement—gold prices are up about 3.3%, heading for a third straight weekly gain and the biggest weekly rise since June.

These weekly gains are attributed to strong safe-haven demand amid rising concerns about global debt levels and renewed tensions over Trump’s tariffs.

US Dollar

The dollar index fell by 0.25% on Friday, reflecting the decline of the greenback against a basket of global currencies, which in turn supported higher gold and other dollar-denominated commodities.

US Interest Rates

• On Wednesday and Thursday, the US released a series of economic data showing further weakness in the labor market.

• Following this, CME FedWatch data showed pricing for a 25 basis point Fed rate cut in September jumped from 92% to 99%, while the probability of no change dropped from 8% to 1%.

• October rate-cut probabilities also rose, with a 25 basis point reduction priced at 99%, versus just 1% for no change.

• Several Fed officials reiterated that labor market concerns continue to support the case for rate cuts. Fed Governor Christopher Waller stated he believes the central bank should lower rates at its upcoming meeting.

US Jobs Report

To further confirm the above pricing, markets are awaiting the US monthly jobs report later today, which will include key labor data such as non-farm payroll additions for August, the unemployment rate, and average hourly earnings.

At 12:30 GMT, non-farm payroll data is expected to show the US economy added 75,000 jobs in August, compared to 73,000 in July, with unemployment rising to 4.3% from 4.2%, while average hourly earnings are forecast to hold steady at a 0.3% increase.

Outlook for Gold

• Ole Hansen, Head of Commodity Strategy at Saxo Bank, said the short-term direction for gold depends on US jobs data and its impact on rate-cut expectations, bond yields, and the dollar. He noted that weaker-than-expected jobs figures could push prices toward $3,650, while the $3,450–$3,500 range remains a key support zone.

• Hansen added that the mix of lower funding costs, concerns about Fed independence, geopolitical risks, a steepening yield curve, and a weaker dollar all point toward further gains in precious metals.

SPDR Fund

Holdings of the SPDR Gold Trust, the world’s largest gold-backed ETF, fell yesterday by 2.29 metric tons, marking a second consecutive daily decline, bringing the total down to 981.97 metric tons.

The euro rose in the European market on Friday against a basket of global currencies, moving into positive territory versus the US dollar, supported by the weaker performance of the greenback in the foreign exchange market, ahead of the release of US monthly jobs data.

Consumer price data released this week highlighted persistent inflationary pressures on European Central Bank policymakers, which led to a decline in expectations for an ECB rate cut in September.

Price Overview

• Euro exchange rate today: the euro rose against the dollar by 0.2% to $1.1675, from the opening level of $1.1649, with a low at $1.1643.

• The euro ended Thursday’s session down 0.1% versus the dollar, as concerns over financial stability in Europe receded.

European Interest Rates

• Data released this week showed an unexpected increase in core inflation in the euro area during August, underscoring persistent inflationary pressures on the ECB.

• Following this data, pricing of a 25 basis point ECB rate cut in September fell from 30% to 10%.

• Five sources told Reuters that the ECB is likely to keep rates unchanged next month, though discussions about further cuts may resume in the autumn if the eurozone economy weakens.

US Dollar

The dollar index fell by about 0.2% on Friday, reflecting declines in the US currency against a basket of global peers, as labor market data from the US reinforced expectations of a Fed rate cut in September.

According to the CME FedWatch tool: probabilities of a 25 basis point Fed rate cut in September are currently steady at 99%, while the probability of no change is at 1%.

To reassess those expectations, investors await the US monthly jobs report later today, which the Federal Reserve relies on heavily in evaluating the state of the labor market and setting appropriate monetary policy for the world’s largest economy.

Euro Outlook

At Economies.com, we expect that if US jobs data come in below market forecasts, expectations of a September Fed rate cut will be confirmed, supporting further gains in the euro against the US dollar.

The Japanese yen rose in the Asian market on Friday against a basket of major and minor currencies, as part of a recovery from five-week lows against the US dollar, supported by bargain buying from lower levels and positive economic data showing a strong jump in Japanese wages.

Despite this rise, the Japanese currency is on the verge of incurring a second consecutive weekly loss, due to growing concerns this week over the political situation in Japan, the world’s fourth-largest economy.

Global financial markets later today await the release of the US monthly jobs report, which will provide decisive pricing for the probabilities of the Federal Reserve cutting interest rates in September and October.

Price Outlook

• Yen exchange rate today: The dollar fell against the yen by about 0.3% to (148.08¥), from the opening price of (148.49¥), recording the highest level at (148.52¥).

• The yen ended Thursday’s session down by 0.3% against the dollar, nearing the lowest level in five weeks at 149.14 yen, pressured by political conditions in Japan.

Japanese Wages

Japan’s Ministry of Labor said Friday that total monthly cash earnings and a separate measure of full-time wages rose by 4.1% year-on-year in July, the fastest pace since December 2024, better than expectations of a 3.0% rise. Wages had increased by 3.1% in June.

Rising wages in Japan could pave the way for further price increases and faster inflation in the coming period. Undoubtedly, intensifying inflationary pressures on policymakers at the Bank of Japan increase the chances of additional interest rate hikes before the end of this year.

Japanese Interest Rates

• Following the above data, pricing of the probability of the Bank of Japan raising interest rates by a quarter point at the September meeting rose from 25% to 35%.

• To re-price those probabilities, investors await more data on inflation, unemployment, and wages in Japan, in addition to monitoring comments from some Bank of Japan members.

Weekly Performance

Over the course of this week, which officially ends with today’s settlement, the yen is down about 0.75% against the US dollar, on the verge of incurring a second consecutive weekly loss.

Political Situation in Japan

The secretary-general of Japan’s ruling party, Hiroshi Moriyama, one of Prime Minister Shigeru Ishiba’s closest allies, announced his intention to resign from his post, in a move that could deepen the party’s crisis and cast a shadow over Ishiba’s political future.

This development comes after growing pressure on the prime minister following the recent electoral defeat, with mounting calls for him to step down, though he has so far held firm and refused to resign.

Observers believe that Moriyama’s departure could weaken Ishiba’s internal standing and increase the likelihood of him coming under more political pressure in the period ahead.

These developments open the door for Sanae Takaichi as one of the leading candidates to succeed Ishiba. She is known for her economic stance favoring the maintenance of low domestic interest rates, which reinforces expectations of a more accommodative monetary policy in Japan should she assume the premiership.

US Jobs

Later today, the August US jobs report will be released, including new nonfarm payrolls, the unemployment rate, and average hourly earnings.

This data will provide decisive pricing for the probabilities of the Federal Reserve cutting interest rates by 25 basis points at the September meeting and another 25 basis points at the October meeting.

Expectations for Yen Performance

We at Economies.com expect the Japanese yen to continue trading in positive territory against the US dollar, especially if US jobs data comes in cooler than market expectations.

Ethereum price declined during Thursday’s trading session under pressure on most major cryptocurrencies, as markets assessed US economic data and awaited the monthly employment report in the world’s largest economy.

According to ADP data released Thursday, the private sector added 54,000 jobs in August, while expectations pointed to 75,000, after July’s addition of 104,000 jobs.

The US Department of Labor also reported an increase of 8,000 in initial jobless claims to 237,000 in the week ending August 30, the highest level since late June, compared with expectations of 230,000.

A report from the Institute for Supply Management (ISM) showed that the services PMI rose to 52 in August from 50.1 in July.

According to CME FedWatch, there is now a 97.4% probability of a Federal Reserve rate cut in the September meeting following the ADP report, up from 96.6% the previous day.

This comes ahead of the release of the US nonfarm payrolls report for August on Friday, data that could determine the Fed’s decision in this month’s meeting.

Ethereum

In trading, Ethereum fell by 3.8% to $4,304.5 on CoinMarketCap at 21:32 GMT.