Gold prices climbed on Thursday as weaker U.S. labour data, softer oil prices and comments from the Federal Reserve indicating easing inflation risks lifted investor sentiment ahead of key employment figures.
Spot gold rose 0.9 percent to US$4,064.41 per ounce, reaching its highest level since late June, while U.S. gold futures for August edged slightly lower at US$4,076.60.
The move marks a rebound after two consecutive sessions of declines, with investors positioning ahead of the latest U.S. nonfarm payrolls report, a key indicator for the Federal Reserve’s interest rate outlook.
Markets were also reacting to comments from Federal Reserve Chair Kevin Warsh, who said inflation risks and expectations had eased in recent weeks, while reaffirming the central bank’s commitment to its 2% inflation target.
Analysts say the tone of the Fed’s messaging has reduced fears of further aggressive tightening, helping support demand for non-yielding assets like gold.
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However, expectations remain mixed, with traders pricing in a high probability of continued restrictive policy depending on upcoming labour data.
Economists polled by Reuters expect U.S. nonfarm payrolls to have increased by about 110,000 jobs in June, down from 172,000 in May. A stronger-than-expected reading could reinforce expectations of higher interest rates, which typically weigh on gold by increasing the opportunity cost of holding the metal.
Weaker oil prices also supported gold by easing broader inflation concerns. Oil markets fell for a third straight session after reports of progress in indirect talks between Iran and the United States over the Strait of Hormuz, a key global shipping route.
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Lower energy costs tend to reduce inflation pressure, giving central banks more flexibility to maintain or soften monetary tightening policies.
Despite the recent rally, analysts caution that gold remains sensitive to upcoming U.S. data, with further gains dependent on signs of labour market weakness that could shift expectations toward a less aggressive Federal Reserve stance.
Elsewhere in metals markets, silver, platinum and palladium also posted gains, reflecting broader strength across precious metals as investors hedge against macroeconomic uncertainty ahead of key economic releases.
