Gold prices were little changed on Thursday, touching fresh weekly highs in early deals as investors turned cautious ahead of the closely watched United States nonfarm payrolls (NFP) report.
By 3:20 pm AEST (5:20 am GMT) spot gold prices were trading $3.33 or 0.1% lower at US$3,353.75 per ounce.
The metal’s mild pullback followed a three-day rally, driven by sustained weakness in the U.S. dollar and growing expectations for a near-term Fed rate cut.
The Greenback continued to hover just above its lowest levels in more than three years, having suffered heavy selling pressure amid signs of a weakening U.S. labour market.
Traders were repositioning after the dollar’s recent slide, which has intensified amid uncertainty over upcoming trade negotiations and weak domestic economic data.
Despite a brief reprieve on Wednesday following news that the United States and Vietnam had reached a trade agreement ahead of a key July 9 deadline, dollar bears quickly reasserted control as labour market concerns resurfaced.
ANZ analysts wrote in a note to clients: "More trade deals at lower tariffs could build some confidence that inflation will remain benign, thus allowing the Fed to ease monetary policy."
In its latest monthly update, payrolls firm ADP reported that private-sector employment fell by 33,000 jobs in June - the first contraction since March 2023.
May’s figure was also revised down to a gain of just 29,000. Markets had expected a stronger reading of 95,000 for June.
The disappointing data fed into heightened expectations of an interest rate cut by the Federal Reserve, with the CME FedWatch Tool now pricing in a roughly 25.3% chance of a rate cut at the July meeting.
The outlook for gold remains highly sensitive to the upcoming NFP report, due later Thursday. Forecasts suggest U.S. job growth slowed to 110,000 in June, down from 139,000 in May, while the unemployment rate is expected to rise modestly to 4.3% from 4.2%.
A significantly weaker reading could accelerate U.S. dollar losses and heighten bets on a July rate cut, providing further upside for gold.
