Gold climbed for a third straight session on Friday, approaching a one-and-a-half-week high after weak US jobs data cut expectations for Federal Reserve rate hikes and pressured the dollar. The metal was on track for its first weekly gain in five weeks, though geopolitical risk capped further upside.
Gold rose for a third consecutive session on Friday, rebounding from its lowest level since November 2025 reached earlier in the week. The metal climbed to a one-and-a-half-week high in Asian trading and stayed poised for its first weekly advance in five weeks. Traders watched the $4,200 area, where a sustained break could trigger further buying.
The rally followed softer US labor data that pushed investors to scale back bets on more Federal Reserve tightening. Because the metal pays no yield, it gained as US yields and the dollar eased.
Weak payrolls reset the Fed path
The June US Nonfarm Payrolls report showed the economy added 57K jobs, far below the 110K consensus. The prior month's reading was revised down to 129K from 172K, while the unemployment rate ticked down to 4.2% in June.
Although unemployment edged lower, the wider data pointed to a cooling labor market. Alongside easing inflation concerns tied to a recent drop in crude oil prices, that shift moved market pricing from one or two Fed rate hikes in 2026 toward zero to one increase. The reassessment kept the dollar pinned near a two-week low and steered flows into gold.
Central banks added to the structural support. According to ING strategists citing the World Gold Council, central banks bought around 41 tonnes in May, led by Poland at 18 tonnes and China, which extended its buying streak to 20 consecutive months.
Geopolitics caps the upside
Persistent geopolitical risk limited the dollar's decline and tempered gold's gains. Citing The New York Times, TradingPedia reported that US officials expressed concern Israel might be planning to target Iran's senior negotiators during indirect peace talks, a move officials believed could reignite conflict. Separately, according to TradingPedia, Iran's military headquarters warned that any US intervention in the Strait of Hormuz would face a "decisive and swift response".
With US equity and bond markets closed for Independence Day, trading was thin. On the charts, gold held above its 100-period moving average and the 23.6% Fibonacci retracement of the April-June decline, with the next resistance seen near $4,301.41.
Sources: TradingPedia, FXStreet
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