Gold prices remained steady near a two-week high on Monday after a softer-than-expected U.S. jobs report reduced concerns that the Federal Reserve would continue raising interest rates in the near term.

As of 02:52 GMT, spot gold was steady at $4,174.66 per ounce, after earlier touching its highest level since June 22. Meanwhile, U.S. gold futures for August delivery rose 1.5% to $4,186.70 per ounce.

Weaker U.S. Jobs Data Eases Rate Pressure

The main support for gold came from last week’s U.S. employment report. The data showed that job growth slowed sharply in June, while payroll gains for the previous two months were also revised lower.

This suggests that the U.S. labor market is showing signs of cooling, which in turn has reduced expectations that the Fed will soon continue raising interest rates. According to the CME FedWatch tool, markets are now pricing in about a 55% chance of a Fed rate hike in September, down from more than 60% before the jobs data was released.

Lower interest rates are generally supportive of gold because gold is a non-yielding asset. When pressure from yields eases, gold tends to become more attractive to investors.

Stronger U.S. Dollar Still Caps Gold’s Upside

Although rate-hike expectations have eased, gold has yet to make a strong breakout as the U.S. dollar remains firm. The dollar index gained 0.1%, making gold more expensive for investors holding other currencies.

Tim Waterer, chief market analyst at KCM Trade, said gold has regained some stability as markets dial back expectations for further Fed rate hikes. However, the strength of the U.S. dollar continues to act as a ceiling for the precious metal’s upside momentum.

Last week, gold recorded a gain of more than 2%, ending a four-week losing streak. This indicates that buying interest has returned as investors reassess the outlook for Fed monetary policy.

Investors Await Fed Meeting Minutes

The next key focus for the market will be the minutes of the Fed’s June 16–17 meeting, which are due to be released on Wednesday. Investors will closely watch for signals related to interest rate policy, inflation, and the Fed’s assessment of the labor market.

In addition, J.P. Morgan said demand for gold from key sectors may not be as strong as previously expected. This could limit gold’s upside this year, with the bank forecasting gold at around $4,300 per ounce in the third quarter and $4,500 per ounce in the fourth quarter.

Other Precious Metals

In the precious metals market, spot silver fell 0.6% to $62.03 per ounce, after earlier hitting its highest level since June 23.

Platinum slipped 0.1% to $1,636.60 per ounce, while palladium declined 0.2% to $1,271.75 per ounce.

Conclusion

Gold is being supported by expectations that the Fed may slow the pace of monetary tightening following weaker-than-expected U.S. jobs data. However, gold’s upside remains limited by the strength of the U.S. dollar and investor caution ahead of the upcoming Fed meeting minutes.

In the short term, gold could continue to hold a positive tone if U.S. economic data weakens further and rate-hike expectations continue to ease. On the other hand, if the Fed signals a more hawkish stance in its meeting minutes, pressure on gold could return.

Source: Reuters