Gold prices experienced a slight increase on Friday as traders remained cautious ahead of crucial labor data that could influence U.S. monetary policy. At the same time, copper witnessed some upward movement in anticipation of signals on Chinese stimulus measures.
Gold faced downward pressure earlier in the week due to concerns over a hawkish Federal Reserve, leading to a stronger dollar. However, signs of resilience in the U.S. economy heightened expectations of further interest rate hikes by the Fed.
Spot gold prices inched up 0.1% to $1,936.05 per ounce. While December gold futures rose by the same percentage to $1,971.45 per ounce. Nevertheless, spot prices experienced a 1.2% decline during the week, and futures dropped 2% from the crucial $2,000 level.
Market focus shifted to the nonfarm payrolls data, expected to reveal the stability of the U.S. labor market in July. Any indication of a resilient labor market could push the Fed to continue raising interest rates as part of its efforts to combat inflation.
Earlier private payrolls data had exceeded expectations, raising concerns about similar readings from official data.
Positive Momentum for Gold and Copper Amid Labor Data and Chinese Stimulus Signals
Although inflation has eased this year, a robust labor market has maintained price pressure support. June’s nonfarm payrolls had fallen below expectations, prompting hopes of limited room for further rate hikes by the Fed.
Other precious metals also saw gains, with platinum up 0.3% and silver adding 0.1% on Friday.
As for copper, prices rebounded on Friday. Recovering most of the week’s losses as traders awaited signals from China, the major copper importer.
Copper futures rose 0.3% to $3.9072 per pound, despite a 0.5% decline during the week that saw significant recovery from earlier lows.
Chinese officials were expected to announce additional stimulus measures, aiming to bolster domestic spending and support the property market.
The world’s largest copper importer is facing challenges in its post-COVID economic recovery, with notable slowdowns during the second quarter. And a muted start to the third quarter, as revealed by recent data.