DIGIVESTASI - Gold prices neared a one-week peak on Thursday (5/9/2024), boosted by a weaker dollar and falling US bond yields. US labor data released earlier raised investor hopes of a significant cut in Fed interest rates this month.

Quoting CNBC International, spot gold prices rose 0.9% to US$ 2,515.40 per ounce after jumping 1.1% earlier in the session. However, the increase was slightly corrected after the release of US services sector data. US gold futures also recorded a 0.7% gain to US$ 2,543.1.

In August, the number of workers hired by private employers in the US hit a 3.5-year low, indicating a potentially significant slowdown in the labor market. Previous data also showed a sharp decline in the number of job openings in the US in July.

Phillip Streible, Chief Market Strategist at Blue Line Futures, stated that the surge in gold prices occurred after the ADP data was released, reflecting the worrisome labor market conditions and raising concerns among market participants.

“Initial jobless claims data also did not paint a positive picture of employment conditions,” he added.

Traders currently estimate a 59% chance that the Fed will cut rates by 25 basis points (bps) this month, as well as a 41% chance of a 50 bps cut, according to the CME FedWatch tool.

San Francisco Fed President Mary Daly stated on Wednesday (4/9/2024) that the US central bank needs to cut interest rates to maintain the health of the labor market, although the size of the cut will depend on incoming economic data.

The market focus is now on the non-farm payrolls (NFP) report which will be released on Friday (6/9/2024).

“If the August unemployment rate is in line with July's figure of 4.3%, which is the highest since 2021, this could push gold prices close to record highs as expectations of jumbo rate cuts increase,” said Han Tan, Chief Market Analyst at Exinity Group.

Apart from gold, prices of other precious metals also rose. Spot silver rose 1.9% to US$28.82, platinum jumped 2.7% to US$926.74, and palladium increased 0.9% to US$942.36.

Find more news and articles on Google News