Gold rises as weak ADP employment data strengthens rate cut bets

Gold prices firmed on Wednesday as weaker-than-expected jobs data fueled hopes of the U.S. Federal Reserve cutting rates sooner than anticipated, while investors also awaited the upcoming non-farm payrolls report for further cues on monetary policy.

Spot gold was up 0.3% at $3,348.60 per ounce, as of 0151 p.m. EDT (1751 GMT). U.S. gold futures settled 0.3% higher at $3,359.7.

“The grimace-inducing -33k print in ADP private payrolls - the first showing net job losses since early 2023 - is giving gold a nice bump,” said Tai Wong, an independent metals trader.

Earlier in the day, the ADP National Employment Report showed U.S. private payrolls fell for the first time in more than two years in June, suggesting the Fed might cut rates as soon as September.

Federal Reserve Chair Jerome Powell on Tuesday reiterated that the Fed is taking a patient approach to further interest rate cuts. But he did not rule out a reduction at this month’s meeting, saying everything depends on incoming data.

That raises the stakes for the monthly non-farm payrolls report due on Thursday for more insight into the health of the labor market.

“If we get a much stronger-than-expected jobs report, that’s going to be bearish because the Fed might not be able to cut rates as soon as it wants to or as many times as it might otherwise,” Jim Wyckoff, a senior analyst at Kitco Metals, stated.

Gold, traditionally considered a hedge during times of uncertainty, also thrives in a low-interest rate environment.

Traders are also focussed on U.S. tariff uncertainty ahead of the July 9 deadline. Adding to investor concerns, Trump’s massive tax-and-spending bill, expected to add $3.3 trillion to the nation’s debt, is headed to the House of Representatives for possible final approval.

Spot silver rose 1.2% to $36.49 per ounce, platinum was up 4.6% at $1,413.40, while palladium gained nearly 5.2% to $1,157.09.

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