Gold prices today: Yellow metal hits two-week high after poor US jobs data lifts Wall Street rate cut bets

Gold prices hit their highest in over two weeks on Friday, August 2, as Treasury yields and the US dollar declined after data showed the US economy created fewer jobs than expected in July and US manufacturing activity shrank. This lifted Wall Street bets on upcoming rate cuts by the US Federal Reserve

Spot gold was up over one per cent at $2,472.59 per ounce, just $11 shy of the record peak of $2,483.60 scaled on July 17. US gold futures climbed 1.4 per cent to $2,516.50. Gold has gained 3.2 per cent so far this week, on track for its best week since April, as rising safe-haven demand from Middle East tensions and expectations of rate cuts made the metal more appealing for investors.

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Elsewhere, spot silver added 0.8 per cent to $28.78 per ounce, platinum rose 0.8 per cent to $966.60, and palladium dropped 1.2 per cent to $894.37. All three metals were headed for weekly gains. On the multi-commodity exchange (MCX), gold futures last traded 1.15 per cent lower at ₹69,445 per 10 grams.

What's weighing on gold prices?

-According to analysts, lower yields, some safe-haven buying and the idea of a weakening economy, which is bringing rates lower along with the dollar, all support the gold market. Bullion is traditionally considered a hedge against geopolitical and economic risks, and lower interest rates reduce the opportunity cost of holding the asset.

-US 10-year yields dropped to their lowest since December, and the US dollar hit its lowest since March after data showed that employers added fewer jobs in July than economists had forecast, while the unemployment rate increased to 4.3 per cent.

-The data follow comments from Fed Chair Jerome Powell, who said rates could be cut as soon as September if the US economy follows its expected path while addressing a post-policy press conference after the July Fed monetary policy verdict.

-Analysts said the marketplace is now factoring in a better-than-70 per cent chance for a 50-basis-point cut by the Powell-led Federal Open Market Committee (FOMC) at its upcoming monetary policy meeting in September.

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Where are gold prices headed?

‘’Comex gold closed marginally higher at $2,480.80/oz yesterday after retreating from its record high of $2,506.60/oz owing to recovery of the US dollar following a sharper-than-expected contraction in the US manufacturing PMI, which fell to an eight-month low of 46.8 in July from 48.5 in June,'' said Kaynat Chainwala, AVP-Commodity Research, Kotak Securities

The risk of a broader conflict in the Middle East is enhancing gold's appeal as a safe haven, with markets closely monitoring Iran's response to Israel's attack that killed a Hamas leader. Today, Comex Gold is approaching record-high levels amid rising expectations for multiple rate cuts this year,'' she added.

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"Gold prices surged by over ₹600, reaching ₹70,555, with Comex gold supporting the buying trend at $2,460, up by more than $17. The rise is driven by renewed fears of a US recession following higher jobless claims…The broad trend for gold remains positive,'' said Gold from Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities.