Gold Price News: Gold Rallies On Interest Rate Cut Hopes

Gold prices rallied to a six-week high on Friday, lifted by US data which bolstered the case for interest rate cuts in the coming months.

Prices climbed as high as $2,393 an ounce on Friday, compared with around $2,357 an ounce in late deals on Thursday. That was the highest price for gold since May 22.

The market appeared to react to a US unemployment report on Friday which showed that jobless numbers rose to 4.1% in June, above market expectations of 4%.

In addition, US non-farm payrolls figures were released Friday, and while the headline number for June beat the market’s expectations, the figures for April and May were revised sharply lower. Together, the latest round of figures points to a softer than expected US jobs market, and this strengthens expectations of interest rate cuts coming after the summer.

Friday also marked the return of US traders to the market following the July 4 Independence Day holiday.

The US dollar reacted by falling to a three-week low against other major currencies on Friday, further driving strength in gold as it makes the dollar-denominated precious metal cheaper for buyers in other currencies, boosting demand.

Elsewhere, think tank the Economist Intelligence Unit published a report on Thursday forecasting that gold prices will average $2,312 an ounce in 2024, rising to $2,498 an ounce on average in 2025: Gold rally to continue as demand remains strong – Economist Intelligence Unit (eiu.com)

The group cited bullish factors including expectations that the US Fed and ECB will continue to lower interest rates in 2025, and strong demand on the back of central bank and retail buying.

Looking ahead, Monday is looking light on macro data releases, and the markets will be watching out for a round of speeches by US Fed officials on Tuesday for more clues on the trajectory ahead for interest rates.