(RTTNews) – Gold prices have climbed sharply on Monday as investors parsed the June month U.S. payrolls data revealing slow job growth against the broader outlook for a hawkish stance by the U.S. Federal Reserve through this year.
Front Month Comex Gold for August month delivery has leapt by $36.50 (or 0.88%) to $4,162.20 per troy ounce.
Front Month Comex Silver for August month delivery has soared by $1.251 (or 2.06%) to $62.095 per troy ounce.
The U.S. markets remained closed last Friday (i.e., July 3) in observance of the July 4, Independence Day. Hence, the U.S. nonfarm payrolls data was released one day prior on Thursday.
The data released by the U.S Bureau of Statistics revealed that the U.S. economy added 57,000 jobs in June, far below a downwardly revised 129,000 in May and forecasts of 110,000.
This is the lowest job gain in four months, following three consecutive months of stronger-than-expected gains.
After the meeting in June, when the U.S. Federal Reserve announced its interest rates, projections hinted at a higher interest rate regime throughout this year.
While some policymakers hinted at a rate hike in the next meeting itself, others speculated an interest hike later at the end of 2026.
However, following last Thursday’s jobs report, investors toned down their expectations of an immediate interest rate increase by the Fed.
The central bank is now expected to pause on considering a rate hike at its next meeting.
Generally, gold loses its appeal when borrowing costs rise since it is a non-yielding asset.
On the energy front, crude oil prices came down, with a gradual recovery seen in shipping traffic across the Strait of Hormuz after the signing of a Memorandum of Understanding between the U.S. and Iran on June 17.
In addition, after a virtual meeting yesterday to review theglobal marketconditions, seven members of the Organization of the Petroleum Exporting Countries announced plans to hike oil production by 188,000 barrels per day.
WTI crude oil for August month delivery was last seen trading at $68.28, down by $0.41 (or 0.60%).
Easing oil prices led to lowering of inflationary concerns and weighed on the U.S. dollar.
Recent data suggested that global central banks added a net 41 metric tons of gold reserves during May.
On the economic front in the U.S., S&P Global’s Composite Purchasing Managers’ Index increased to 51.90 in June from 51.50 in May, below the preliminary estimate of 52.20.
Data released by the Institutes for Supply Management revealed today that the Services Purchasing Managers’ Index fell to 54.00 in June, down from 54.50 in May.
The U.S. dollar index was last seen trading at 100.96, up by 0.11 (or 0.11%) today.
Currently, investors are betting on a 25.10% chance of a quarter-basis-point interest rate-hike in the upcoming Fed’s meeting on July 28-29 while the bets on rates being held at the current level stand at 74.90%, according to the CME Group’s FedWatch Tool.
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