Gold Price Extends 'Friday Chaos' Rebound
Monday, 8/04/2025 14:47
GOLD PRICES steadied at 7-session highs on Monday after rebounding into the weekend on expectations that US interest rates will be cut sooner and deeper thanks to shock weakness in US jobs data plus a new attack on Federal Reserve chief Jerome Powell by President Trump,
says Atsuko Whitehouse at BullionVault.
"No one can be that wrong? We need accurate Jobs Numbers," said Trump on the social media platform he owns, firing the Commissioner of Labor Statistics and
calling again for the resignation of "stubborn moron" Powell after Fed Governor Adriana Kugler suddenly announced she's stepping down from the central bank 5 months early.
Trump on Friday also announced the deployment of 2 nuclear submarines near Russia amid a social-media argument with senior Kremlin figure and former Russian President Dmitry Medvedev.
The spot gold price in London today edged up 0.1% to $3367 per Troy ounce, extending Friday's $65 jump after more than reversing last week's earlier drop.
Gold's rally began after the Bureau of Labor Statistics said the world's largest economy added just 73,000 jobs in July – its weakest print in 5 months – with the prior 2 months' growth revised down by nearly 260,000, pushing up the unemployment rate to 4.2%.
Friday also saw President Trump roll out the steepest US trade tariffs since the 1930s' Great Depression, pushing the overall effective tariff rate to 17% according to analysts at ratings agency Fitch.
"Friday didn't disappoint in its chaotic spread of headlines," says Nicky Shiels, head of metals strategy at Swiss bullion refining and finance group MKS Pamp, pointing to the "expected" news of Trump's tariffs, the "unexpected" news of Kugler's Fed resignation, and "extreme price action" in gold.
The odds of a September rate cut from the US central bank – seen as a 63% shot this time last week – have now risen to over 85%, according to betting in the futures market tracked by derivatives exchange the CME's FedWatch tool.
From there, Fed rates are now expected to finish 2025 at 3.77% – more than a quarter-point lower than the futures market's forecast only last Thursday.
Marking the steepest 2-session drop since the FOMC revised its own end-2025 forecast to 3.9% last December, this is the
lowest such prediction since early July.
Having repeatedly called on Powell to cut rates or quit, "I have an open spot on the Federal Reserve Board," Trump said Friday about Kugler's resignation, saying that he's "very happy about that" while alleging that the academic economist and former policy advisor quit due to disagreements with the Fed chair.
Two of Trump's own Fed appointees – Christopher Waller and Michelle Bowman – last week voted against the July meeting decision to keep the Fed's key interest rate steady, calling instead for a cut.
Kugler was absent from the vote.
"Markets value central bank independence, at least around the setting of policy rates," says Dan Ivascyn, chief investment officer of fund management giant Pimco.
"Although there's always tension between policymakers, any attempt to reduce independence would be very bad for markets."
The Dollar Index – a measure of the US currency's value versus its major peers – edged higher by 0.2% today after dropping nearly 1.5% on Friday's steep US jobs data slowdown and revision.
That put the Euro gold price at €2912 per Troy ounce while the UK Pound price of gold hit £2535.
Prices for silver – which finds nearly 60% of its annual demand from industrial uses – rose 0.7% to $37.28 per ounce.
The grey metal had fallen 3.9% last week after
Trump made a sudden about-turn on copper import tariffs, crushing the base metal's US futures price by more than one-fifth.
Trump fired Erika McEntarfer, head of the Bureau of Labor Statistics, just hours after Friday's non-farm payrolls report for July, accusing her of political bias as an appointee of his Democrat predecessor Joe Biden.
William Beach, McEntarfer's predecessor, who was appointed during the first Trump administration, called the firing "totally groundless" and said it sets a "dangerous precedent."
Ten-year US Treasury yields – a benchmark rate for government as well as corporate and commercial borrowing – edged up by 2 basis points on Monday after dropping 14-basis points in the last session amid the weak jobs data and Fed rate-cut pressure.
Policy-sensitive 2-year yields also steadied following a 28-basis point drop on Friday – the biggest decline since December 2023.
European stock markets rebounded from some of last week's steep losses, with Europe's Stoxx 600 index rising 0.7%, nearly halving the previous session's drop.
US stock futures also indicated a rebound after the S&P 500 posted its worst week since May, as geopolitical tensions added to the risk-off tone across markets.
But Switzerland's stock market fell hard, reacting to Trump's punitive 39% trade tariff on Swiss imports.
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