Gold prices steadied on Monday after a weekly decline, as weaker-than-expected US jobs data prompted traders to scale back bets on further interest-rate increases by the Federal Reserve. The shift in expectations offered support to the precious metal, which tends to suffer when higher rates raise the opportunity cost of holding non-yielding assets.
The pullback in rate-hike wagers followed the latest US employment report, which showed a softer pace of hiring than economists had anticipated. The data reinforced the view that the Fed may be nearing the end of its tightening cycle, a prospect that weighed on the dollar and Treasury yields. A weaker dollar makes gold cheaper for buyers using other currencies, while lower bond yields reduce the appeal of fixed-income assets relative to bullion.
Gold had slipped over the previous week as robust economic indicators and hawkish comments from some Fed officials kept alive the possibility of another rate rise. But the jobs figures shifted the narrative, with market-implied probabilities of a further increase falling sharply. Investors now appear more focused on how quickly the central bank might pivot to cutting rates, a scenario that historically has been favourable for gold.
Analysts noted that the metal remains sensitive to incoming economic data, particularly inflation and labour-market readings, which will shape the Fed’s next moves. «The market is trading on every piece of data that could alter the Fed’s path,» one strategist said, adding that gold’s recent range-bound trading reflects uncertainty over the timing of a policy shift.
Beyond US monetary policy, gold continues to draw support from central-bank buying and safe-haven demand linked to geopolitical tensions. Several emerging-market central banks have been adding to their reserves, providing a steady underlying bid for the metal. Retail investment in gold-backed exchange-traded funds has also shown signs of stabilising after months of outflows.
Looking ahead, traders will scrutinise upcoming speeches from Fed officials and the next round of inflation data for further clues on the rate trajectory. A sustained softening in US economic momentum could weaken the dollar further and extend gold’s recovery, while any upside surprise in inflation might revive tightening expectations and cap gains.
In the broader commodity complex, gold’s steady tone contrasted with mixed performance in industrial metals, where concerns about global growth continued to weigh on sentiment. Oil prices were little changed as traders balanced supply risks against demand uncertainties.
For now, gold appears to have found a footing after its weekly slide, with the market’s focus firmly on the Fed’s next step. The metal’s ability to hold above recent lows suggests that investors are not yet ready to abandon the safe-haven trade, even as the interest-rate outlook remains the dominant driver.