Happy Friday, traders. Welcome to our weekly market wrap, where we take a look back at these last five trading days with a focus on the market news, economic data, and headlines that had the most impact on gold prices and other key correlated assets—and may continue to in the future.
So, what kind of week has it been?
Here's what you need to know:
- Gold's recent slide toward $4,000/oz was arrested on Thursday morning, allowing spot prices to retrace steadily higher into Friday and target a weekly close just below $4,200.
- The week's main pressure point remained the market's adjustment to a more hawkish Federal Reserve, with futures bets pricing in a growing risk that the Fed's next move could be a rate hike.
- The turn came from softer labor-market data, including a weaker-than-expected ADP report on Wednesday and a Thursday NFP print of just 57,000 jobs, which pressured the Dollar and Treasury yields while lifting gold.
- Next week's calendar looks lighter, but Wednesday's June FOMC meeting minutes may help traders judge how committed Fed officials were to the more hawkish rate path that surprised markets.
So, What Kind of a Week Has It Been?
For the first time in a number of weeks, there is a positive tint to the near- or medium-term outlook for gold after the yellow metal's recent collapse toward $4,000/oz was arrested on Thursday morning, and prices spent the following 24 hours retracing steadily higher. As of Friday morning—with equity markets closed for the US holiday, but commodities trading live in the morning—gold spot has recovered to target a weekly close just below $4,200, flipping what once looked like a loss of -1% on the week into a theoretical gain of nearly +2%.
A Hawkish Fed Keeps Pressure on Gold
As the week began, gold continued to be dragged lower as the market continued to price in the reality of the Federal Reserve having struck a much more hawkish tone than anticipated in June at Kevin Warsh's first FOMC meeting as Fed Chair. After the quarterly updated Staff Economics Projections indicated that a growing number of Fed officials anticipated a rate hike before the end of 2026, even as the US-Iran war that has constrained global economies for months appeared to be winding down, some Fed Futures bets implied as high as a 90% likelihood of the next move being a hike. Accordingly, the US Dollar has continued strengthening. Under the weight of competing with the Dollar as a safe-haven investment, along with being a non-yielding asset facing down expectations for higher market yields in the medium term, gold prices had been sliding since mid-June and consistently breaking below expected technical support levels in an approach to the major fundamental level of $4,000/oz. At the start of this week, there did appear to be signs of the precious metal consolidating a bit, but only just above $4,050.
For a time on Tuesday, it looked like gold might finally be giving up the ghost, as more hawkish rhetoric from Fed officials—Cleveland Fed President Beth Hammack in particular—re-accelerated the rate-hike trade and briefly tipped spot prices for gold as low as $3,970. Despite markets being more lightly attended in US hours during a holiday week, market depth ultimately didn't present any air pockets to allow prices to drop aggressively lower, however, and when Wednesday's ADP report on private-sector jobs added by the US economy in June came in softer than expected, there was a quick repricing. Investors and analysts chose to preemptively hedge against the likelihood of the Federal Reserve raising rates because a marked deterioration of the US labor market would make this a much less digestible option; higher interest rates and the resulting slowdown of the US economy would almost certainly worsen labor market conditions.
Soft Jobs Data Sparks a Sharp Repricing
Traders that took the preemptive hedges on Wednesday were already rewarded for it a day later with the release of the BLS' June Jobs Report on Thursday. Against the consensus projection for nonfarm payrolls to climb by more than +100,000, June's NFP came in much shorter at just 57,000. The June reporting also revised the prior month's strong increase lower by nearly 50,000. Several major asset classes repriced to the downside surprise aggressively once cash markets opened in New York. The Dollar softened while Treasury yields dropped precipitously. Gold surged +2.5% higher on the day thanks to the tailwinds provided not just by weakness in other assets, but also by the improved macroeconomic outlook for a non-yielding metal.
Looking Ahead
Trading is already slowing late Friday morning as European desks roll off and US traders—if they even came in—take an early leave for the holiday. So, barring a late-afternoon news dump, we are looking for gold to remain steady above $4,100. Next week, we expect trading to remain muted as we get into the dog days of summer, so over the next few sessions, we'll look to see if this translates to stability above $4,000 once again or if the last 36 hours of trading was more of a bounce than a rally. The economic calendar for next week itself is light, although on Wednesday, we will get to see the discussion minutes from the June FOMC meeting that caught so many off guard. With that, we may be able to parse just how firm or tentative Fed officials' belief in the necessity of rate hikes was two weeks ago.
In the meantime, traders, I hope you can get out and safely enjoy your weekend for the next couple of days. After that, I'll see you back here next week for another market recap.
