WASHINGTON (dpa-AFX) - Gold prices moved solidly higher on Friday following weaker-than-expected US jobs data that reinforced expectations of a Federal Reserve rate cut in September along with prevailing weakness in the U.S. dollar.
Front Month Comex Gold for September delivery jumped by $47.40 (or 1.33%) to $3,613.20 per troy ounce today. Notably, gold gained substantially by $139.50 (or 4.02%) per troy ounce this week.
Today's price is a new record high for gold, which has moved higher for three consecutive weeks.
Front Month Comex Silver for September delivery rose by 16.30 cents (or 0.40%) to $41.074 per troy ounce today. Silver surged by 87.40 cents (or 2.17%) per troy ounce this week.
Today's settlement value is the second highest this year for silver, which has increased for three consecutive weeks.
Data released by the US Labor Department today revealed that non-farm payrolls rose by 22,000 in August, well below an upwardly revised 79,000 in July and market forecasts of 75,000, underscoring signs of a cooling labor market.
The unemployment rate crept up to 4.3% in August from 4.2% in the previous month, while labor force participation rate inched up to 62.30% in August from 62.20% in July.
The weaker jobs data consolidated expectations of an interest rate cut by the Fed at their upcoming September 16-17 monetary policy meeting.
According to CME Group's FedWatch Tool, investors are betting on 88.1% chances of a 25-basis-point interest rate cut at the Fed's September meeting.
Non-yielding bullion performs well in a low-interest environment and hence is the first choice for risk-averse investors.
Reportedly, countries globally are accumulating gold as macroeconomic uncertainty in world trade persists still, although record high prices this week has discouraged buyers in India and China (top gold consumers) from physical gold.
Last Friday, an appeals court in the US ruled the tariffs imposed by the US President Donald Trump on US trading partners are 'illegal.' The judgment has added confusion to the tariff scenario as the final outcome in this crucial issue appears beyond speculation.
While many countries have signed a trade deal with the US after making heavy concessions to avoid tariffs, a few (especially Canada and India) are still continuing their negotiations with US officials.
Challenging the verdict in the US Supreme Court, the Trump administration has sought a speedy trial and pleaded for overturning the lower court's judgment. Trump stated that a loss in the case could cause the US to suffer greatly as America has to unwind all the trade deals.
On the geopolitical front, ignoring calls for a truce in its military attacks against Ukraine despite US intervention, Russian President Vladimir Putin today warned that countries deploying troops in Ukraine would be a 'legitimate target' for the Russian military.
Pessimism about a Russia-Ukraine peace deal has also driven demand for safe-haven gold among investors.
A variety of factors, including trade tensions, tariff uncertainty, geopolitical conflicts, increasing inflation, etc., have weighed down on the U.S. dollar and strengthened the demand for the precious metal.
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