Gold under pressure before US jobs data

Gold prices declined in European markets on Friday, resuming losses that had paused the previous day, and are on track to test a four-week low. The metal is heading for a third consecutive weekly loss due to the strong performance of the US dollar against a basket of major currencies.

The drop comes in the wake of a more hawkish-than-expected Federal Reserve policy meeting, which reduced the likelihood of a rate cut in September. Markets now await the release of the US nonfarm payrolls report later today to reassess the Fed’s next steps.

Price Overview

Gold fell by 0.25% to $3,281.84 an ounce, down from the session’s opening at $3,289.84. The intraday high stood at $3,300.41. On Thursday, gold rose 0.45%, rebounding from a four-week low of $3,268.89.

For the month of July, gold lost around 0.4%, marking its first monthly decline of 2025, driven by reduced safe-haven demand and profit-taking from record highs.

Weekly Performance

Gold is down approximately 1.7% so far this week, on pace for a third straight weekly loss.

US Dollar Strength

The dollar index rose 0.1% on Friday, extending gains for a seventh consecutive session to reach a two-month high of 100.16. The rally reflects ongoing dollar strength amid reduced recession fears in the US, following recent trade deals with Japan and the EU, and stronger economic data.

Federal Reserve Outlook

As expected, the Fed left interest rates unchanged on Wednesday, holding the target range at 4.25%–4.50% for the fifth straight meeting.

The Fed stated that inflation and unemployment risks remain elevated amid economic uncertainty. Fed Chair Jerome Powell remarked that future policy steps will likely remain neutral and noted potential inflationary effects from new tariffs.

Interest Rate Expectations

According to CME’s FedWatch tool, the probability of a 25 basis point cut in September dropped from 64% to 43% following the Fed meeting. Odds of holding rates steady rose from 34% to 57%.

Expectations for a rate cut in October also fell—from 78% to 64%—while chances of no change increased to 36%. Traders now anticipate only about 35 basis points in total easing by year-end, down from prior estimates.

Jobs Report in Focus

Markets await the July nonfarm payrolls report at 13:30 GMT for fresh guidance on rate policy. Forecasts point to 106,000 new jobs versus 147,000 in June, with unemployment expected to rise to 4.2% from 4.1%. Average hourly earnings are seen increasing 0.3%, up from 0.2% last month.

Outlook for Gold

Marex analyst Edward Meir noted that gold has been trading between $3,250 and $3,450 for nearly two months, and may now breach the lower bound due to dollar strength fueled by the Fed’s hawkish stance.

He added that failure to renegotiate tariffs could reignite trade tensions and lift gold prices again. However, FX News Today expects that stronger-than-expected jobs data would further lower rate-cut odds and potentially push gold below $3,250 an ounce.

SPDR Gold Trust Holdings

Holdings in SPDR Gold Trust, the world’s largest gold-backed ETF, fell by 0.86 metric tons on Thursday—marking a second consecutive daily decline—to 954.51 metric tons, the lowest level since July 21.