Gold Prices Hold Firm Amid US Economic Uncertainty and Trade Tensions

Precious metals supported by weaker dollar, soft labour data, and geopolitical risk

Gold Edges Lower but Remains Strong on Weekly Gains

Gold prices dipped slightly in Asian trading on Thursday, easing back after a robust performance earlier in the week. The pullback follows weaker-than-expected US labour data and ongoing concerns over global trade, which have continued to support demand for safe-haven assets.

As of Thursday morning, spot gold was down 0.1% to $3,368.61 an ounce, while August gold futures slipped 0.2% to $3,382.65 per ounce.

Despite the dip, gold remains on track for a 2.4% gain this week, making it one of the strongest-performing assets amid growing economic and political instability.

Weak US Jobs Data Fuels Rate Cut Expectations

The latest support for gold came after a disappointing ADP payrolls report, which showed that US private sector job growth in May was significantly below expectations. This has raised the likelihood of further interest rate cuts by the Federal Reserve later this year.

Markets are now eyeing Friday’s nonfarm payrolls report, which is expected to confirm signs of a cooling US labour market. If confirmed, this would likely boost gold prices further, as investors seek safety amid concerns of a potential economic slowdown.

Trade Policy Uncertainty Bolsters Haven Demand

Adding to market nerves is continued uncertainty over US trade policy. President Donald Trump recently announced a doubling of tariffs on steel and aluminium, and a deadline for trade partners to submit revised proposals passed with no new deals announced.

Investors are also awaiting a possible call between Trump and Chinese President Xi Jinping, which could influence future trade negotiations. However, both sides have remained silent, fuelling market speculation and uncertainty.

Geopolitical Risks Support Precious Metals

Geopolitical tensions are also driving gold demand. Escalating military action between Russia and Ukraine has dampened hopes of a US-brokered ceasefire, while Middle East instability continues to weigh on global sentiment.

These developments have reinforced gold’s role as a hedge against geopolitical risk, further supporting its price.

Weaker Dollar Benefits Broader Metal Markets

Gold wasn’t the only metal seeing movement. A softer US dollar—which fell 0.4% this week to a six-week low—has made commodities priced in dollars more attractive to foreign investors.

• Silver futures held steady at $34.64 per ounce
• Platinum futures rose 0.3% to $1,089.65 per ounce
• Both are up between 3% and 5% for the week

Among industrial metals:

• Copper futures on the London Metal Exchange slipped slightly to $9,631.75 per tonne
• US copper futures fell 0.2% to $4.8890 per pound

These metals remain broadly supported by improved market sentiment and lower US interest rate expectations.

Outlook: Gold Likely to Remain Strong in Uncertain Climate

With global markets rattled by a mix of economic slowdown fears, trade instability, and geopolitical conflict, demand for gold and other precious metals is expected to stay firm in the short term.

As traders await more definitive signals from US payroll data and trade talks, gold prices are likely to remain elevated, particularly if the Federal Reserve confirms a dovish stance in the months ahead.

Sources: (Investing.com, Reuters)