Gold prices surged more than 1.5%, as weak U.S. jobs data boosted expectations of interest rate cuts and tariffs sparked demand for safe havens

On Friday (August 1), in the US market, the US non-farm payrolls data was less than expected to boost the Federal Reserve's interest rate cut hopes, and the new tariff announcement stimulated safe-haven demand. Gold prices rose by more than 1.5% on Friday, setting a new one-week high.

As of 00:27 Beijing time on Saturday, spot gold rose 1.8% to $3,341.14 an ounce, or 1.56%, hitting its highest level since July 25. Gold prices have risen 0.4% so far this week. U.S. gold futures rose 1.6% to $3,403.

"The jobs numbers were below expectations but slightly above the market's lowest forecasts," said Bart Melek, head of commodity strategy at TD Securities. "That raises the possibility that the Fed will cut rates later this year." Gold, a non-yielding asset, typically outperforms in a low interest rate environment.

The U.S. Labor Department's Bureau of Labor Statistics reported that nonfarm payrolls rose by just 73,000 in July, well below market expectations of 110,000, and June data was revised down to just 14,000, indicating a significant slowdown in job growth. The unemployment rate rose to 4.2%, indicating that the labor market is cooling.

According to the CME's FedWatch tool, market participants currently expect the Federal Reserve to cut interest rates twice before the end of the year, starting in September.

Earlier this week, the Federal Reserve kept interest rates unchanged at 4.25% -4.50%. Chairperson Powell said it was too early to tell whether to cut rates in September, and it was necessary to pay attention to inflation and employment data.

Mr. Melek added: "We are facing inflationary pressures from tariffs and wages, but the employment data is disappointing. In this context, a Fed rate cut would be materially positive for gold."

On trade, Mr. Trump slapped a new round of tariffs on exports from dozens of trading partners including Canada, Brazil, India and Taiwan, sending global markets tumbling as countries struggle to negotiate a better deal. Safe-haven gold is in high demand at a time of economic and geopolitical turmoil.

So far in 2025, gold prices have risen by more than $400, hitting a record high of $3,167.57 on April 3, driven by safe-haven demand and central bank purchases.

The weak jobs data also caused the dollar to fall against major currencies, further supporting gold prices as a weaker dollar makes gold more attractive to investors holding other currencies.