Gold prices rose in the European market on Friday, resuming gains that had paused temporarily yesterday amid correction and profit-taking, approaching once again their all-time highs and potentially surpassing the $3,900 per ounce mark for the first time in history, supported by the decline of the US dollar against a basket of global currencies.
In addition, strong expectations remain that the Federal Reserve will cut interest rates twice before the end of this year. To reprice those expectations, markets throughout the day await the release of the September US jobs report.
Price Overview
• Gold prices today: gold rose by 0.35% to (3,865.27$), from the opening level at (3,856.40$), with a low recorded at (3,838.22$).
• At Thursday’s settlement, gold prices fell by 0.25%, marking their first loss in six days, due to correction and profit-taking after earlier hitting an all-time high at 3,896.91$ per ounce.
Weekly Trading
Over the course of this week, which officially concludes at today’s settlement, gold prices are so far up about 2.9%, on the verge of a seventh consecutive weekly gain, the longest winning streak since late December 2024.
US Dollar
The dollar index fell on Friday by 0.15%, resuming losses that had temporarily halted in the previous session, reflecting continued weakness of the US currency against a basket of major and minor currencies.
This decline comes amid a string of weak US labor market data, which strongly reinforces expectations of two US interest rate cuts this year, alongside ongoing concerns linked to the government shutdown.
US Interest Rates
• Data on Wednesday showed that US private sector companies unexpectedly lost jobs in September, marking a second monthly loss in a row.
• The job openings report on Tuesday pointed to a slight increase in openings in August, alongside weaker hiring momentum, signaling a slowdown in labor market strength.
• Lorie Logan, President of the Dallas Federal Reserve Bank, stated that last month’s rate cut was an appropriate precautionary move against severe labor market deterioration, but emphasized the need for caution.
• Traders boosted their bets on two additional Fed rate cuts this year.
• Following the above data and according to CME’s FedWatch tool: pricing of a 25-basis-point rate cut in October rose from 90% to 99%, while pricing for rates to remain unchanged fell from 10% to 1%.
US Jobs
To reprice the above expectations, markets await throughout the day the release of the US monthly jobs report, which will include key data on the labor market, especially the number of non-farm jobs added in September, along with unemployment and average hourly earnings.
The prolonged US government shutdown, now in its third day as of Friday, has already delayed the release of key economic data such as weekly jobless claims, and may also delay today’s jobs report.
Without a specified time during the US trading session, the non-farm payrolls data may show that the US economy added 52,000 new jobs in September, up from 22,000 in August, with unemployment steady around 4.3% and average hourly earnings expected to rise by 0.3%, the same as the previous reading.
Outlook for Gold Performance
UBS analyst Giovanni Staunovo said: “Data suggests the Federal Reserve may cut interest rates more than once this year.”
He added: “While we expect further cuts, this should support gold prices more in the coming months, and we anticipate the yellow metal will surpass the $4,000 per ounce barrier before year-end.”
SPDR Fund
Gold holdings at the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell yesterday by 3.15 metric tons, bringing the total to 1,015.74 metric tons, down from 1,018.89 metric tons, which was the highest level since 13 July 2022.
