Gold prices ease ahead of US data as investors weigh Fed rate stance

Gold prices edged lower on Wednesday (Jul 2) as investors awaited US payroll data and assessed Federal Reserve chair Jerome Powell’s cautious stance on rate cuts, although a weaker US dollar helped limit losses for greenback-priced bullion.

Spot gold was down 0.2 per cent at US$3,330.68 per ounce, as at 0217 GMT, while US gold futures fell 0.3 per cent to US$3,340.60.

The US dollar index weakened to its lowest point in more than three years, making bullion more affordable for holders of other currencies.

“Gold prices are consolidating after posting the strongest gains in two weeks. The overall trend bias continues to favour the upside for now,” said Ilya Spivak, head of global macro at Tastylive, adding Fed policy expectations are taking centre stage at the moment.

Powell reiterated that the US central bank plans to “wait and learn more” about the impact of tariffs on inflation before lowering interest rates, again setting aside US President Donald Trump’s demands for immediate and deep rate cuts.

US job openings unexpectedly increased in May, but a decline in hiring added to signs that the labour market had shifted into lower gear amid uncertainty over the Trump administration’s tariffs on imports.

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Investors are now awaiting US ADP employment data, due later in the day, and nonfarm payroll (NFP) figures on Thursday for further insights into labour market conditions.

“The biggest risk for gold is an unexpectedly strong (NFP) result, but that seems rather unlikely to happen,” Spivak said.

Meanwhile, US Senate Republicans narrowly passed Trump’s tax-and-spending bill on Tuesday, a package cutting taxes, reducing social safety net programmes, and boosting military spending, while adding US$3.3 trillion to the national debt.

Trump expressed optimism on Tuesday about a potential trade deal with India but was sceptical about reaching a similar agreement with Japan. He added that he was not considering an extension of the Jul 9 deadline for countries to negotiate trade deals.

Spot silver edged down 0.1 per cent to US$36.01 per ounce, platinum fell 0.4 per cent to US$1,344.91, while palladium gained 0.4 per cent to US$1,104.92. REUTERS