Gold prices climbed on Friday and were poised for a weekly gain, as weaker-than-expected U.S. economic data outweighed earlier optimism spurred by a high-level phone call between U.S. President Donald Trump and Chinese President Xi Jinping. Market participants also looked ahead to a key U.S. jobs report that could influence monetary policy expectations.
As of 05:48 GMT, spot gold was up 0.3% at $3,363.33 per ounce, bringing its weekly gain to 2.3%. Meanwhile, U.S. gold futures advanced 0.4% to $3,387.
The gains in gold came despite initial market optimism following Thursday’s rare direct call between Trump and Xi, which focused on escalating trade tensions and disputes over critical minerals. While the conversation was seen as a positive step, it left several major issues unresolved, limiting its impact on risk sentiment.
“Some of the initial enthusiasm for risk appetite following the Trump-Xi call has started to wear off, which has enabled gold to creep higher,” said Tim Waterer, chief market analyst at KCM Trade.
Adding to gold’s appeal were signs of growing weakness in the U.S. labor market. New unemployment claims rose to a seven-month high last week, signaling a potential slowdown in job creation. Investors are now closely watching the upcoming nonfarm payrolls (NFP) report, due at 12:30 GMT, for further insights.
According to a Reuters poll, economists expect the U.S. economy to have added 130,000 jobs in May, with the unemployment rate holding steady at 4.2%. The report is being seen as a critical data point that could determine the direction of gold and broader financial markets in the near term.
“The upcoming NFP release could be the catalyst for a breakout should the data produce a significant miss on either side of expectations,” Waterer added.
Despite signs of a cooling labor market, Federal Reserve officials have indicated that inflation remains their primary concern, suggesting that interest rates may remain elevated for longer. Gold, traditionally viewed as a hedge during times of economic uncertainty and low interest rates, has benefitted from this cautious policy stance.
However, demand for physical gold was subdued this week in key Asian markets. In India, dealers were forced to offer the highest discounts in over a month, as elevated global prices dampened consumer appetite.
In other precious metals, spot silver slipped 0.7% to $35.92 per ounce, though it remained near a 13-year high. Platinum rose 1.7% to $1,149.85, while palladium gained 0.7% to $1,012.60. All three metals were on track for weekly gains, buoyed by investor interest amid macroeconomic uncertainty.
The next move in the gold market is likely to hinge on Friday’s U.S. jobs report and any subsequent signals from the Federal Reserve regarding its policy outlook.
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