Gold surges to a six-week high following dismal US labor market data.

Gold prices rallied during the mid-North American session following the release of June’s US Nonfarm Payrolls (NFP) report. Although the report exceeded forecasts, downward revisions for the previous two months suggested the labor market is cooling faster than the data indicates. Consequently, traders are betting on a Federal Reserve rate cut in September, creating a headwind for the US Dollar and a tailwind for gold.

XAU/USD is trading at $2,391, showing gains of over 1.40% for the day and more than 2.70% for the week after rebounding from daily lows of $2,349. This rise is partly due to a weaker US Dollar, which is being undermined by lower US Treasury bond yields. The US Dollar Index (DX) has decreased by 0.16% to 104.95, while the US 10-year benchmark yield has dropped by more than six basis points to 4.284%.

Despite positive June NFP data, revisions for April and May showed the economy added 111,000 fewer jobs than previously reported, causing the unemployment rate to rise slightly in June. Additionally, data from the US Bureau of Labor Statistics (BLS) indicated that Average Hourly Earnings (AHE) remained flat month-over-month but declined year-over-year.

Geopolitical factors also influenced gold prices. Israeli Prime Minister Benjamin Netanyahu sent a delegation to continue hostage negotiations and reiterated that the war would not end until Israel achieves all its objectives. Meanwhile, a Hamas leader stated they are awaiting a positive response from Israel to begin detailed negotiations, according to CNN.

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