Gold Rises to $2,500 on Weak U.S. Job Data, Fed Rate Cut Speculation
Gold prices surged on Wednesday following weaker-than-expected U.S. job vacancies data, pushing the metal to briefly touch $2,500 per ounce. The decline in job openings, reported by the U.S. Bureau of Labor Statistics, increased speculation of a significant Federal Reserve interest rate cut in September, weakening the U.S. dollar and bond yields.
Spot gold initially fell to $2,471.69 per ounce in European trading but rebounded in the U.S. session, climbing sharply after the release of the Job Openings and Labor Turnover Survey (JOLTS). Job openings fell to 7.67 million, the lowest level since early 2021, below economists’ expectations.
By the close, spot gold gained 0.1%, settling at $2,495.22 per ounce. Analyst Christian Borjon Valencia noted that gold's upward trend resumed, supported by falling U.S. Treasury yields and a weaker dollar.
U.S. bond yields fell after the data, with the 10-year Treasury yield dropping to 3.776%, while the U.S. Dollar Index slipped 0.37%. Traders are now increasing bets on a potential 50 basis point rate cut at the Federal Reserve’s September meeting, with the odds rising to 43%, according to CME’s "Fed Watch" tool.
More job market data is expected later this week, including ADP employment numbers, initial jobless claims, and the non-farm payrolls report. Analysts predict ADP employment growth to reach 150,000 for August, with non-farm payrolls anticipated to rise to 163,000.
Gold typically benefits in low-interest-rate environments, as non-interest-bearing assets become more attractive. If gold remains above $2,500 per ounce, the next resistance levels are seen at $2,531 and $2,550, with the potential to target $2,600. Conversely, if prices drop below $2,500, support is expected at $2,470 and further down at $2,431.
