Gold prices moved higher on Friday after weaker-than-expected U.S. labor market data weighed on the dollar. Despite the daily gains, the precious metal is still heading toward a weekly loss as stronger currency movements and shifting interest-rate expectations pressured the market earlier in the week.
At 08:50 ET (13:50 GMT), spot gold was trading about 0.7% higher at $5,117.52 per ounce, while gold futures gained 0.9% to $5,124.70 per ounce.
Even with Friday’s rebound, gold remains on track to decline roughly 3% for the week. The recent strength of the U.S. dollar and reduced expectations for near-term interest-rate cuts have weighed on bullion prices.
Weak U.S. Payrolls Data Pressures the Dollar
Fresh economic data released on Friday revealed unexpected weakness in the U.S. labor market. Total nonfarm payroll employment fell by 92,000 jobs in February, missing forecasts that had expected a gain of 58,000 jobs.
January’s payroll figure was also revised slightly lower to 126,000 from the previously reported 130,000.
The unemployment rate increased to 4.4%, surpassing expectations that it would remain at January’s level of 4.3%.
Signs of a slowing labor market pushed the U.S. dollar lower. The U.S. Dollar Index declined around 0.3% as investors reassessed the likelihood of near-term interest rate cuts by the Federal Reserve.
Despite the daily drop, the dollar is still set for a strong weekly gain, supported by its traditional safe-haven appeal amid escalating geopolitical tensions in the Middle East.
Rising Oil Prices Complicate Inflation Outlook
Energy markets have also been in focus this week. Oil prices are on track to surge more than 18% as the ongoing conflict threatens key energy infrastructure and shipping routes in the Persian Gulf region.
The sharp increase in crude prices has raised concerns about a new wave of global inflation. Higher energy costs often feed directly into consumer prices, making it more difficult for central banks to ease monetary policy.
As a result, the outlook for interest-rate cuts has become more uncertain. Policymakers may become more cautious about lowering borrowing costs if rising oil prices continue to push inflation higher.
Gold Supported by Geopolitical Tensions
The conflict involving the United States, Israel, and Iran has intensified over the past week, with missile strikes and retaliatory attacks increasing fears of disruption to global energy supplies.
In remarks that added to political uncertainty, Donald Trump said he would like to play a role in determining Iran’s future leadership once the war ends.
Gold traditionally benefits from geopolitical uncertainty and lower interest rates. However, the metal struggled to maintain strong upward momentum this week as the stronger U.S. dollar and rising government bond yields reduced its attractiveness for investors.
Copper Inventories Rise as Metal Flows Back to LME Warehouses
Among other precious metals, silver prices increased 2.1% to $83.875 per ounce, while platinum rose 0.6% to $2,142.80 per ounce.
Meanwhile, copper markets showed mixed performance. Copper futures on the London Metal Exchange slipped 0.4% to $12,883.70 per ton, while U.S. copper futures remained mostly unchanged at $5.8050 per pound.
Copper inventories monitored by the London Metal Exchange jumped nearly 8% on Thursday, reaching their highest level in 16 months.
Analysts at ING Group said the increase in stockpiles reflects strong inflows of copper into LME warehouses. The shift has been driven by changing regional price incentives.
Previously, higher price premiums in the United States encouraged copper to move into U.S. warehouses. As those price differences have narrowed, metal is increasingly flowing back into global exchange inventories.
According to ING analysts, the rising inventory levels may create a more challenging short-term environment for copper prices.
