Gold prices jumped more than 1% on Friday and are on track for their first weekly gain in five weeks, as weaker-than-expected U.S. employment data strengthened expectations that the Federal Reserve may take a less aggressive approach to interest rates.
Spot gold rose 1.4% to $4,179.94 per ounce, reaching its highest level since June 23. U.S. gold futures for August delivery also climbed 1.6% to $4,193.20 per ounce.
The precious metal is set to post a weekly gain of about 2.3%, its first weekly advance since late May. Investor sentiment improved after disappointing U.S. jobs data increased hopes that inflationary pressures may ease and reduced expectations for further monetary tightening.
Gold also benefited from weakness in the U.S. dollar, which is heading for weekly losses. A weaker dollar makes gold less expensive for buyers using other currencies, often boosting demand for the metal.
Market expectations regarding Federal Reserve policy shifted following the employment report. According to the CME FedWatch Tool, traders now see a lower likelihood of an interest rate increase in September, with expectations falling to around 54% from roughly 66% before the jobs data was released.
Gold typically performs better in lower-interest-rate environments because it does not generate income or interest. When rates rise, investors often shift toward assets that offer higher returns, reducing gold’s appeal.
Other precious metals also recorded strong gains on Friday.
Silver climbed 2.3% to $62.43 per ounce, platinum advanced 2.7% to $1,660.05 per ounce, and palladium gained 1.3% to $1,284.40 per ounce.
All three metals reached their highest levels in more than a week and are also on track to end the week with solid gains, reflecting stronger investor demand across the precious metals market.
