E-Paper
Gold price today in US: Drops 1% to $3,328.63 as rate cut hopes fade
Spot gold fell 0.9% to $3,328.63/oz by 2:00 p.m. EDT after dropping over 1% earlier. US gold futures closed 0.4% higher at $3,342.90.
The price of gold fell by 1% after a strong US jobs report came in stronger than expected on Thursday, thus making it less likely for the Federal Reserve to cut interest rates, which makes gold less attractive, Reuters reported.
Spot gold dropped 0.9% to $3,328.63 an ounce by 2:00 p.m. EDT (1800 GMT). Earlier in the day, it had dropped over 1%. US gold futures, however, closed 0.4% higher at $3,342.90.
The US dollar and stock index futures went up after new jobs data came out. The report showed that non-farm payrolls rose by 147,000 in June. Experts had expected an increase of only 110,000 jobs, according to a Reuters survey.
A stronger dollar usually makes gold more expensive for buyers in other countries.
Also Read: Mortgage rates fall again in US: 15-year stands at 5.57%, 30-year at 6.61%
Lesser likelihood of a Fed rate cut earlier than currently anticipated
David Meger, who works at High Ridge Futures, said, “The better than expected jobs number means we see a lesser likelihood of a Fed rate cut earlier than currently anticipated. As a result, the dollar strengthened, which is adding pressure to the gold market.”
He also added, “The key is the fact that the idea or possibility of a July rate cut is off the table.”
After the jobs report, traders are now expecting about 51 basis points of rate cuts from the Fed by the end of 2025. Before the report, the expectation was around 66 basis points. The first cut is now seen in October.
Gold does better when interest rates are low because it doesn’t earn interest.
On the trade side, the US and Vietnam reached a deal on Wednesday. This happened just before US tariffs on Vietnam were set to begin on July 9.
In Washington, House Republicans moved forward with a big tax-and-spending plan backed by Donald Trump. It could add $3.4 trillion to the US debt if passed.
Carsten Menke from Julius Baer said, “As the indebtedness of the US continues to grow, investors might become more concerned about the US dollar, which should benefit gold in the longer-term.”
Other metal prices
Other metals also moved on Thursday, following Spot silver rose 0.7% to $36.84 an ounce, platinum dropped 3.1% to $1,374.89 and palladium fell 1.5% to $1,137.69.
