Weaker-than-expected US payrolls data spurred bets against a Fed rate hike, lifting XAU/USD to $4,111 and pressuring the USD.
Gold prices surged over 2% to $4,111 after US Nonfarm Payrolls rose by just 57K in June, well below the 110K estimate. The miss, alongside downward revisions for May and April, weighed on the USD and Treasury yields, reducing Fed rate hike expectations.
Prior to the release, May payrolls were revised down from 172K to 129K, while April’s figure fell from 179K to 148K. The Unemployment Rate dipped to 4.2%, though labor force participation declined. The US Dollar Index dropped 0.55% to 100.85, while the 10-year Treasury yield settled at 4.483%.
Markets now price a 66% chance of a 17 basis points Fed rate hike in September, down from earlier expectations.