Quick overview

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The yellow metal’s appeal was weakened as XAU/USD fell 1% amid stronger-than-expected US payroll data, solidifying expectations that the Fed is unlikely to lower interest rates as soon as previously thought. Spot gold had dropped 1 percent to $3,325.48 an ounce late Thursday, while US gold futures dipped 0.7 percent to $3,335 per ounce.

The Labour Department reported that non-farm payrolls increased by 147,000 jobs last month, which caused the dollar and US stock index futures to rise.

Payrolls were predicted to increase by 110,000 by economists surveyed by Reuters. Bullion is more costly for foreign buyers when the dollar is stronger. There is less chance of a Fed rate cut earlier than currently predicted because of the better-than-expected U.S. economic data

Generally speaking, non-yielding gold does well when interest rates are low. U.S. tariffs are scheduled to go into effect on July 9, but on Wednesday, an agreement between the United States and Vietnam was announced. While this was going on, Republicans in the US House of Representatives moved Trump’s massive tax cut and spending bill closer to a final yes-or-no vote. The bill is estimated to increase the nation’s debt by $3.4 trillion, potentially. “In the long run, gold should benefit from investors’ increased concern over the US dollar as the US’s debt keeps growing,” stated Carsten Menke, an analyst at Julius Baer.