Gold climbs above $4,400 ounce for first time since June Updated

Gold prices firmed and were en route to their biggest weekly gain since January, helped by weaker oil prices as investors reacted to a mixed US nonfarm payrolls report for July.

Spot gold was up almost 3% to $4,356.28 an ounce after hitting a seven-week high in the previous session. Prices are up over 5% for the week. US gold futures gained 0.3% to $4,312.00, CNBC reports.

Hopes of peace in the Middle East saw inflation expectations drop, allowing gold to surge higher from a multi-week consolidation above $4,000, said Matt Simpson, a senior analyst at StoneX.

US President Donald Trump told reporters that he believed the war with Iran would be over soon and said the armed forces were experiencing issues with supplies of some weapons.

Crude oil prices were headed for a weekly loss. Lower energy prices help ease inflation concerns and reduce expectations of higher-for-longer interest rates. Gold is an inflation hedge, but elevated interest rates tend to weigh on its appeal as it offers no yield. 

Investors pushed gold higher in the wake of the July nonfarm payrolls that showed a 23,000-job contraction in July, far below Wall Street estimates that jobs would expand by 83,000. The unemployment rate dipped to 4.1% from 4.2% as the number of people working or looking for work dipped from June.

“Regardless of how NFP plays out, $4,000 has proven to be a solid support level - and I suspect bulls are waiting for dips to take advantage of a much-needed correction higher towards $4,600. NFP may provide some noise over the near term, but price action has spoken, and gold looks like it wants to rally,” Simpson added.

Traders currently see a 55% chance of a US rate hike in September, from 63% a week ago, per the CME FedWatch Tool.

17:00

Gold prices rose 2.68% during intraday trading, climbing above $4,400 per troy ounce for the first time since June 17, according to trading data from the Comex exchange.

The precious metal reached $4,416 per troy ounce, marking its highest level in nearly two months, Caliber.Az reports.

Other precious metals also posted strong gains. Silver rose 5.59% to $65.05 per troy ounce, while platinum gained 2.24% to $1,777 per troy ounce.

The broad-based rally reflects increased buying across the precious metals market, with gold returning to levels last seen in mid-June.

11:16

Gold prices rose further on August 7, extending gains from the previous session as investors weighed escalating tensions around the Strait of Hormuz against expectations for the U.S. Federal Reserve's next policy decision while awaiting key U.S. employment data.

Spot gold was up 0.6% at $4,264.22 per ounce as of 01:04 ET (05:04 GMT), while U.S. gold futures also gained 0.6% to $4,323.07 per ounce, Caliber.Az reports via foreign media.

Other precious metals also advanced. Spot silver rose 1.2% to $62.26 per ounce, while platinum gained 0.6% to $1,740.05 per ounce.

Gold briefly traded above the $4,300-per-ounce level on August 6 as optimism over a possible agreement related to the Strait of Hormuz boosted demand for the safe-haven asset.

However, the rally later eased as renewed regional tensions revived concerns that higher energy prices could fuel inflation and strengthen the case for the Federal Reserve to maintain a tighter monetary policy stance.

Market participants are now awaiting the release of key U.S. payrolls data, which could provide further guidance on the outlook for interest rates and influence demand for gold and other precious metals.

By Sabina Mammadli